Showa Shell Seeks to Lead Solar Market Amid Japan Incentives

Showa Shell Sekiyu K.K., the Japanese refining unit of Royal Dutch Shell Plc, plans to become a global leader in solar-cell output as it diversifies to benefit from clean-energy subsidies.

Showa Shell will increase production efficiency and cost competitiveness to “top levels in the world,” it said today in its five-year management plan. The company also intends to lead the development of solar modules, which use photovoltaic cells.

Japan began an incentive program in July to promote alternative power generation following the 2011 Fukushima nuclear disaster. That prompted companies such as mobile carrier Softbank Corp. and Tokyo-based Showa Shell to expand in solar energy as demand climbed.

“Once we gain a foothold in Japan, we want to gain ground in the international market,” Showa Shell President Jun Arai said today at a press briefing. The company is seeking to reduce the cost of CIGS solar panels -- thin-film units using copper, indium, gallium and selenium -- by about half in 2017, he said.

Solar Frontier K.K., a wholly unit of Showa Shell, makes panels at a 900-megawatt plant in southwestern Japan.

Showa Shell’s Energy Solution business posted a 19 percent jump in 2012 sales to 78.2 billion yen ($831 million), while its operating loss narrowed to 15.4 billion yen from 28.8 billion yen, a Feb. 14 filing showed. The division comprises solar-cell production and sales, as well as wholesale power supply.

Japan is poised to become the world’s third-largest market for solar power this year, according to forecasts from researcher Bloomberg New Energy Finance. Showa Shell began research on solar panels in 1978 and investigating CIGS modules in 1993, according to the website of Solar Frontier.

To contact the reporter on this story: Chisaki Watanabe in Tokyo at cwatanabe5@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net

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