Showa Shell Sekiyu K.K. plans to build a ¥100 billion solar panel factory to expand output capacity about 10-fold and offset waning demand for oil products.
The unit of Royal Dutch Shell PLC plans to buy a disused plasma-television factory in Miyazaki Prefecture from Hitachi Ltd. to house the factory, which will have a capacity of 900 megawatts a year, Showa Shell said.
Showa Shell plans to spend as much as ¥160 billion over five years to expand its solar business as domestic sales of oil products wane and renewable energy demand is poised to rise under the Democratic Party of Japan's environmental policies.
Yukio Hatoyama on Monday renewed his party's pledge to reduce Japan's emissions of greenhouse gases by 25 percent by 2020 from 1990 levels, a goal that's more ambitious than outgoing Prime Minister Taro Aso's target of an 8 percent reduction. Incentives for the industry may result in a 20-fold surge in solar sales by 2020, Goldman Sachs Group Inc. analysts Hiroyuki Sakaida and Ikuo Matsuhashi said in an Aug. 17 report.
The plant will be Showa Shell's third solar panel factory in Japan, and expand total photovoltaic panel capacity to 1 gigawatt a year, the firm said. Commercial production is slated to begin in late 2011.
Showa Shell began making solar panels in 2007, commissioning its first plant, also in Miyazaki, with initial capacity of 20 megawatts a year. The company started a second factory in June in Miyazaki and expanded capacity to 80 megawatts, according to the statement.
The firm said in June it will ally with Saudi Arabian Oil Co., or Saudi Aramco, to build small solar plants to supply schools, hospitals and households in the Middle Eastern country.
