Japan to support Five Domestic Consortia with Subsidies/Diplomacy to fight Chinese Solar Energy Competition in Asia and Africa

Japan has decided to from 5 consortia of three to nine companies to bid for large solar projects in Asia and Africa.The Japanese government will support these consortia with subsidies and diplomacy to take on the Chinese solar companies.Note Chinese companies have soundly beaten the Japanese in solar company rankings despite the early mover advantage.Japanese zaibatsus are falling behind the Chinese in the global solar marketshare as low costs,cheap capital and huge subsidies have bankrupted European and American solar companies.Solar Energy in Japan has a long future dating back to 1994 when the government introduced capital subsidies to boost solar energy installations on rooftops.Till 2004,Japan was the largest solar market in the world after which it was overtaken by Germany.After 2004,the growth in the solar industry tapered off as the government reduced the subsidies for solar panels to almost zero.The huge domestic market gave rise to Japanese companies like Sharp,Mitsubishi,Kyocera,Panasonic-Sanyo become top solar panel producers in the world.However the low cost Chinese solar module producers have pushed back most of the Japanese companies

Recently solar panel manufacturers are using cheap Chinese Bank capital to win large solar projects.China  Development Bank recently announced a $10 billion credit line to support three Chinese listed solar companies led by GoldPoly.Besides this Chinese state owned banks have announced more than $30 billino in credit lines to leading Chinese solar companiese like Suntech,Trina and others.

GoldPoly,SunOasis,CTDC to invest $10 billion in European Solar Projects using Cheap Financing from China Development Bank and Merchants Bank

GoldPoly,SunOasis,China Technology Development Group Corp have formed a JV to invest $10 billion in European Solar Projects using Financing from China Development Bank and Merchants Bank.Note these 3 companies have integrated facilities from processing of polysilicon into wafers to making solar panels.Its the first time that 3 Chinese companies have combined to promote such a massive project.

Cheap Financing and Government support have become crucial strategic  weapons for companies these days not unlike the Defense Deals.Japan which has seen its dominance erode in a number of fields to the Koreans and the Chinese has decided to fight back.Note Kyocera has already won a bid deal in Thailand.A Panasonic led consortium will soon bid for a large solar power plant in Indonesia while Sharp,Kaneka will lead a JV into the Middle East.These 5 consortium will not compete against each other operating in different global regions with the aim of winning at least one large project n the next 2 years.

Chinese Solar Industry and Marketshare

China’s Solar Industry is the biggest in the world with 5 of the biggest Solar Panel Manufacturers being Chinese.The low costs of Chinese Solar Panels have made them capture almost 40% of the world’s market in 2010 up from almost 0% in 2005.The remarkable growth in the Chinese Solar Panel Industry has been due to the supportive government,low labor and capital costs and aggressive competition.This has made the higher cost solar panel manufactures cut their prices in order to retain their marketshare.Trina Solar has shown the best growth amongst the solar panel producers and it now competes with Suntech which is the world’s biggest solar panel producer.China has also got a number of Tier 2 and Tier 3 producers of solar panels.

Japan firms ‘plan tie-ups’ for solar power bids

About 20 Japanese firms plan to form alliances to win orders for solar power generators and plants against Chinese and other rivals in the global market, a report said Sunday.They will set up consortiums of three to nine companies each to bid for projects in five areas — Indonesia, the Middle East and North Africa, Latin America, Mongolia and Thailand — the Nikkei business daily said.

The global market for solar power is expanding at a double-digit pace but Japanese companies are falling behind rivals in China and elsewhere, the daily said.The Japanese government plans to help these teams in negotiations with foreign governments and by providing financial assistance, it added.

Panasonic Corp., JGC Corp., Mitsui & Co. and three other firms will tie up on a bid for solar power project in Indonesia.Yokogawa Electric Corp. plans to build a power plant in the Middle East and North Africa using solar cells made by Sharp Corp., Kaneka Corp. and JX Nippon Oil & Energy Corp, Nikkei said.