Japanese Oil Company Sees Renewables Future Via Solar Frontier

Solar power will become a major pillar in the expansion of one of Japan’s largest oil companies, as part of a new five-year growth strategy.

Showa Shell Sekiyu K.K. has announced that it will take advantage of feed-in tariff arrangements for renewable energy, implemented by the Japanese government following the Fukushima nuclear disaster, to become a major producer of solar products.

The company says it must diversify its “menu of power sources” to reflect society’s demand for a low-carbon economy and will allocate free cash flow for investment into new solar module factories and power plants.

Japan’s feed-in tariff rates for renewables such as solar, wind and biomass energy are currently among the highest in the world. Although in the works for many years, the 2011 earthquake and tsunami and the nuclear reactor meltdown that followed sparked action on cleaning up the nation’s energy act.

As of July last year, solar power systems 10 kilowatts capacity and more exporting power into the grid earn 42 Japanese Yen (AUD$0.43) per kilowatt hour; for a period of 20 years. Systems under 10kW capacity earn the same, but for 10 years only.

These arrangements offer a massive opportunity for Showa Shell.

According to a company statement, “We will capture the opportunities of rapid demand growth in Japan supported by new feed-in-tariff for renewable energy and establish No.1 position in Japan.”

Showa Shell is the parent company of Solar Frontier, already the largest supplier of thin-film CIS (copper, indium, selenium) solar panels in the world.

As we reported last month, Solar Frontier achieved a world record-breaking conversion efficiency of 19.7% for cadmium-free, thin-film solar cells. The cadmium-free aspect is a strong selling point as the presence of cadmium telluride in solar panels has raised concerns in the past with relation to potential environmental and human health impacts.

Using the Solar Frontier’s Tokyo-based Kunitomi plant as a base, Showa Shell intends to develop new products that will allow the company to “establish a leading position with regard to [the] Japanese market (mega-solar, commercial, and residential segments).”