Japanese photovoltaic solar power systems firms are under assault from Chinese and South Korean firms that are racing to gain a foothold in the domestic market, a trend that is sending prices plunging, according to a local report.
March 19, 2010 – Japanese photovoltaic solar power systems firms are under assault from Chinese and South Korean firms that are racing to gain a foothold in the domestic market, a trend that is sending prices plunging, notes the Nikkei Business Daily.
Why is Japan suddenly a hot spot for solar firms? The US market is expected to have stayed relatively flat in 2009 with 340,000kW the year before — but Japan more than doubled to 480,000kW, thanks to reinstatement of government subsidies and a late-year introduction of a program to buy surplus electricity from household solar power systems at double the normal power rates, notes the Nikkei daily.
Chinese firm Chaori Solar opened a local business in February, aiming for summertime sales of its ~14%-efficient crystalline-silicon PV systems — but priced at <¥500,000/Watt, cheaper than standard domestic prices, the paper notes. The company has just seven people on its payroll, and pairs its cells with components imported from Korea.
Also entering the market is Canadian Solar (its main plant is in China). Three months after coming into the Japanese residential solar market a year ago the company sold >1000kW of systems; it now has four distributors, selling systems for about 10% below domestic competitors, and targets 20,000kW this year, the paper notes.
South Korea’s Hyundai Heavy Industries, meanwhile, plans to develop Japanese sales channels for its household solar systems in May, hoping to sell ~10% of its 30,000kW output this year in Japan, and keep that 10% to 2011 (50,000kW of 500,000kW total output), the Nikkei daily notes.
And from Taiwan, Motech Industries has already begun sales in Japan, while Gintech Energy is expected to set up a domestic subsidiary this year.
|PV system sales prices — prices/kW in 10K’s of ¥. (Source: Nikkei Business Daily)|
To encourage Japanese consumers’ solar adoption, the government is offering subsidies on residential systems priced at a certain point (currently ¥700,000, expected to drop to ¥650,000 in fiscal 2010); ostensibly to keep down market prices, this also effectively creates a market ceiling for system installers. But with the flood of foreign competition the market prices are falling faster than this government cap, the Nikkei Business Daily notes. Last October, Sanix started selling solar panels (made by Korea’s LS Industrial Systems) for ~¥430,000/kW — nearly 30% below the ¥600,000 for Japanese models (and that price has come down further). And a Yokohama dealer selling Showa Shell systems has lowered its prices ¥700,000 to ¥570,000, while China’s Suntech has cut prices by >10%.
Nevertheless, some high-end Japanese PV systems are resisting the downward price pressure — notably Sanyo Electric models, which sport sector-tops >16% conversion efficiency and are the choice for those who emphasize output, according to the paper. Such systems typically require larger initial investments but enable users to sell more power back to utilities — a key message to get to consumers, the paper notes, if Japanese suppliers hope to stave off foreign competition entrenched in the current price war.