Japanese solar panel manufacturers to benefit from nuclear’s fall from grace

• 13 years ago (2011-04-24)
• Junior Isles

Asia 900 North America 1027 Nuclear 665 Renewables 780

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Japan’s growing anti-nuclear movement in the wake of the world's biggest nuclear accident since Chernobyl is creating an opportunity for Japanese makers of solar equipment. Companies such as Panasonic and Sharp are expected to capitalize on orders that analysts estimate may exceed $100 billion over the next decade, bringing down costs for consumers.

"It's become clear we can't keep relying on nuclear power or fossil fuels," said Koji Toda, chief fund manager at Resona Bank Ltd. in Tokyo. "Still, solar power is too expensive for the market to bloom without subsidies. It's easy to agree on the big picture but not so easy to determine who pays the price."

Toshiba Corp. and Hitachi Ltd., Japan's two largest makers of nuclear reactors, have unsurprisingly underperformed the Topix index, while shares of Panasonic and Sharp have outperformed the benchmark since last month's disaster struck.

Last June, Japan laid out plans to build nine reactors by 2020 and at least five more the following decade to increase the nation's portion of nuclear energy to 50 per cent of overall power generation by 2030 from 29 per cent in 2009. Prime Minister Naoto Kan said in March that the country needs to revise those policies.

That means Japan will probably step up a campaign to encourage the use of solar cells for years at the expense of atomic power, Takashi Watanabe, a Tokyo-based analyst at Goldman Sachs Group Inc., wrote in an recent report. Solar may be the strongest option because of restrictions on where wind and thermoelectric power stations can be built, he said.

Replacing the proposed nuclear plants with solar plants would require 108 GW of photovoltaic generation by 2020, according to Goldman Sachs. Based on the current estimated costs of solar cells, that capacity would cost more than $150 billion.

Solar-panel prices will likely fall to $1.50 per watt in the second half of 2011 from about $1.80 in 2010, Jenny Chase, a solar analyst for Bloomberg New Energy Finance has said.