Solar Frontier K.K. says the switch to a more efficient production process will help cut costs at a new factory intended to serve as a model plant for overseas expansion.
The company aims to shave more than a fifth off its production costs for thin-film solar panels within two years at the plant in Miyagi prefecture, President Atsuhiko Hirano said in an interview. The company expects to cut manufacturing cost to 40 cents per watt from about 50 cents at the moment, Hirano said. Excluding depreciation, costs could fall to as low as 30 cents, he said. "To reach that level would allow us to stay competitive, even though there is further reduction in average selling prices in the market," the president said.
The Miyagi plant has production capacity of 150MW a year. That compares with Solar Frontier's main factory in Miyazaki prefecture in southwestern Japan that can produce nearly 1,000MW annually. The company is planning to build production capacity of 1,000MW outside Japan.
The new plant's compact production line will reduce capital expenditure, while a change in module structure will push down material costs, Hirano said. Further reduction is also expected by cutting the manufacturing process to 8 hours from 24 hours, he said.
"Given that grid parity is just around the corner, the residential solar market can still expand," he said. "Our company is closer than anyone to grid parity and we can use our position to tap into demand."