June 21, 2011 / 3:54 AM / in 7 years

Suntech: sure of 10 percent Japan market share in 2012

TOKYO (Reuters) - Solar panel maker Suntech Power Holdings Co STP.N expects to double its market share in Japan to at least 10 percent in 2012, helped by the expected adoption of a feed-in-tariff scheme, the head of its Japan business said on Tuesday.

Under such a scheme now being discussed by lawmakers, utilities would have to buy surplus electricity at higher rates from large-scale solar projects.

The adoption of a feed-in-tariff scheme will mean the introduction of a business model that Suntech is familiar with, Yutaka Yamamoto told the Reuters Rebuilding Japan Summit in Tokyo.

“We can win once the feed-in-tariff starts,” he said, though he added that Suntech module prices in Japan will still have to be higher than overseas, due to higher maintenance expectations.

Suntech, a Chinese company that is listed in the United States, is the world’s largest solar panel maker. But in Japan it trails Sharp Corp (6753.T), Kyocera Corp (6971.T), Panasonic Corp (6752.T) and Mitsubishi Electric Corp (6503.T). It has been seeking an elusive 10 percent market share since 2009.

It is now wooing general contractors, such as Toshiba Corp (6502.T), Fuji Electric Co (6504.T) and Hitachi Ltd (6501.T), aiming to supply such companies with solar modules.

“We need to take market share from the top four. Our immediate goal is to pass Mitsubishi,” Yamamoto said.

Suntech turned a net profit for the first time in Japan last year, after entering the market in 2006 with its purchase of Japanese solar panel maker MSK. Its Japan sales grew 70 percent to 13 billion yen in 2010, with sales for home-use panels doubling to roughly 50,000 kilowatts, according to think-tank Solar Buzz.

Sharp, Kyocera and Sanyo, which was absorbed by Panasonic, were pioneers in the solar market following the 1970s oil shock, but overseas players such as Suntech and Germany’s Q-Cells QCEG.DE have outrun them in capacity investments, driving down prices.

    Suntech plans to raise its annual solar panel output capacity to 2.4 gigawatts by year-end, up one-third from the end of 2010. That is more than what Japanese firms -- which were the top solar cell makers in 2005 -- together made in 2010.

    Once spending on commercial-use solar projects picks up in Japan, Suntech would be able to underbid Japanese competition in price, Yamamoto said.

    “The entry barrier will be lower, and there is a possibility that many foreign solar makers will enter Japan. We can fight Japanese makers with price, but to defeat foreign makers, we need to strengthen brand recognition,” he noted.

    Japan’s share of the global solar market is now roughly 5 percent, or 1 gigawatt. That will grow to 1.2 gigawatts this year, Yamamoto said.

    The government renewed once-scrapped subsidies for solar panels for homes in 2009, spurring Suntech to step up marketing here.

    Editing by Chris Gallagher

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