(Adds analyst comment, background)
By Mayumi Negishi
TOKYO, June 23 Japan is poised to bring back
subsidies for solar panel makers next year to maintain its lead
in the industry, two officials at its Ministry of Economy,
Trade and Industry said.
The Ministry of Economy, Trade and Industry (METI) will
receive recommendations from a panel that is due to discuss
clean energy on Tuesday, officials said.
The ideas discussed include subsidies and tax breaks that
could halve the cost of putting up solar panels in households,
"It's clear that lack of vision dented Japan's lead in
market share," said the official, who asked not to be named as
he was not authorised to speak to the media. "Japan has the
technological advantage. But the measures would have to be
drastic if we are to keep our lead."
Japan has watched domestic solar demand dry up after it
pulled the plug on subsidies, hurting firms' ability to invest
in research and expansion abroad.
Japan's decision to scrap solar subsidies helped Germany's
Q-Cells AG QCEG.DE beat Japan's Sharp Corp (6753.T) to become
the No.1 supplier of solar cells, while China's Suntech Power
Holdings Co Ltd STP.N nudge out Kyocera Corp (6971.T) for
third place, analysts said.
Japan, still the world's biggest supplier of solar cells,
made a mistake scrapping solar subsidies in 2005, said Nomura
analyst Tetsuya Wadaki.
"The tide won't change quickly. But Japan has owned up to
its mistake. Now there is ample hope," he said.
Because of the low barrier to entry in the solar market
right now, Japanese firms will likely regain their
technological edge only when thin-film technology becomes
mainstream -- around 2010, he, and other analysts, said.
Thin-film solar cells cost less to make because they use a
fraction of the silicon used in other silicon-based solar
cells, but they are now less efficient in turning sunlight into
Japanese firms' failure to procure adequate silicon further
puts a cap on growth in the next two to three years.
Reports about the panel's proposals left shares of Sharp
and Kyocera remained mostly unchanged, while Sanyo Electric Co
Ltd 6764.T, which owns a hybrid technology that combines
elements of thin-film and existing silicon-based cells, closed
up 3 percent at 274 yen.
Shares of makers of solar equipment on expectations that
the measure would further spur investment in environmentally
Japan is also home to solar equipment suppliers such as
Ulvac Inc (6728.T), which jumped 7.8 percent, NPC Inc (6255.T),
which rose 6.2 percent and SES Co Ltd 6290.Q, which rose 15.7
Prime Minister Yasuo Fukuda on June 9 announced a
long-term goal to cut greenhouse gas emissions by 60-80 percent
from current levels by 2050.
The initiative includes a target to have more than 70
percent of newly built houses equipped with solar panels by
(Additional reporting by Tetsushi Kajimoto, Yuko Inoue;
Editing by Louise Heavens)