Solar Frontier plans new 150MW Japan module factory as ‘blueprint’ for overseas operations

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Japanese thin-film PV manufacturer Solar Frontier is to build its fourth CIGS module assembly plant in Japan with a nameplate capacity of 150MW.

The plant, in the village of Ohira, Miyagi Prefecture in the north-eastern Tohoku region of Japan, is scheduled to begin production in March 2015 and will employ an estimated 100 workers. The facility has been tentatively named the Tohoku Plant. The company currently has three other factories in Japan, in Miyazaki Prefecture, in the south of the country.

Solar Frontier plans to invest around ¥13 billion (US$125 million) on building the factory and the company has said the new facility will serve as a “blueprint” for future manufacturing facilities outside Japan. The company will receive some funding from Japan’s ministry of economy, trade and industry (METI), from Miyagi Prefecture, as well as a promotion subsidy from Ohira village. 

Solar Frontier president and director Hiroto Tamai said: “By extending new mass production technologies proven at the Tohoku Plant to manufacturing and sales outside of Japan, Solar Frontier will establish itself as a strong global player.”

He also claimed the new plant would help revitalise the tsunami-damaged Tohoku region.

The need for Solar Frontier to add to its facilities has not come as a surprise for many. When PV Tech spoke to Solar Frontier’s general manager for communications Nobuyuki Nakajima back in late August, Nakajima said that mainly due to demand from the residential sector in Japan on which the company was primarily focussed, “…we are running our plants literally at full capacity to meet the growing demand overall”.

Recent figures release by the Japan Photovoltaic Energy Association showed that domestic demand for Japanese made modules has been rising, while exports have been falling as companies worked to meet the domestic demand.

Solar Frontier said the new factory would “increase manufacturing process efficiencies” by leveraging the company’s mass production technology. Nakajima referred to this strategy when he said in August: “Our scale of operations in Japan is the simplest advantage, which means that all aspects of the supply chain and operations have opportunities for cost reduction.”

However the relatively small size of the new plant at 150MW capacity has raised questions, especially as some commentators had expected Solar Frontier to add capacity to their existing Miyazaki Fab 2 plant, bringing the company’s nameplate production capacity in Miyazaki to over 1GW. 

Vice-president at analysts NPD Solarbuzz, Finlay Colville said: “As a standalone factory, adding 150MW on a different site to the 900MW fab is unlikely to make any noticeable difference with regards to economy of scale, and could even bump up costs.”

Colville said that despite this, since Solar Frontier module plants were already running at full capacity to meet domestic demand, “finding buyers for another 150MW of CIGS panels is not likely to be a problem”. Moreover, with local incentives on offer for fab build-out, staffing and deployment of PV panels in the vicinity, the fab is certainly capable of being operated profitably as a stand-alone unit,” he added.

According to Colville, even before the company’s second plant in Miyazaki had been completed, Solar Frontier had been talking about gigawatt factories being set up in south-east Asia and the Middle East.

“The big question remains as to what Solar Frontier plans to do with capacity and where and when the next gigawatt factory will emerge. This is still the announcement most in the industry are waiting for, and whether Solar Frontier will indeed be the first PV manufacturer to press the start button on the elusive gigawatt fab in the Middle East region.”

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