Solar Frontier in first year of profits

Solar Frontier chalked up its first full-year of profitability in 2013, with owner Showa Shell Sekiyu claiming the company will keep returning to the same well, with Japan to remain the centre of focus for the time being.

Showa Shell’s “Energy Solutions” unit – of which thin-film giant Solar Frontier forms the major part – remains but a small part of its overall business, with its oil-related activities still accounting for nearly 95% of Showa Shell’s overall revenues of ¥2.95tr ($28.9bn) last year.

However, Energy Solutions is growing far more rapidly than the company’s legacy oil-refining business, with revenues surging 80.4% last year to ¥141.2bn, principally on strong sales at Solar Frontier.

Critically, the Energy Solutions unit reported a net income of ¥17.5bn, compared to a net loss of ¥15.4bn in 2012.

While Showa Shell – which is minority owned by Saudi Aramco – does not break out Solar Frontier’s performance individually, it notes that higher sales and reduced costs drove its solar business to “its first ever full-year profit”.

In addition to Solar Frontier, the Energy Solutions unit owns a natural-gas plant, and is building a biomass plant and several large solar arrays.

2013 was a banner year for Solar Frontier, which profited hugely from the booming Japanese PV market, with growing business across the residential, commercial and mega-solar sectors.

Solar Frontier’s 900MW Kunitomi module factory ran at full capacity throughout 2013; its 60MW Miyazaki plant resumed production last July; and in December the company announced plans to open a new 150MW module factory in the Tohoku region.

While Showa Shell says that Solar Frontier’s business “will remain focused on Japan for the time being”, it notes that it is “making preparations” to expand sales internationally.

The Tohoku plant will act as a “blueprint” for future factories outside Japan, with the company having recently told Recharge that any foreign factories will likely be of a modest size, allowing it to get close to a number of key emerging markets.

Showa Shell expects its overall revenues to grow by 7% in 2014, although growth at Solar Frontier will likely be far greater.

Improving the operational efficiency of Solar Frontier's factories remains a priority in the year ahead, Showa Shell says.