Can Solar Frontier be a major solar player or will it remain a Japan centric player like Sharp
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Solar Frontier is the only major thin film solar company with a > 1 GW capacity other than First Solar. The other thin film panel companies have either gone bankrupt, or sold themselves for pennies to the dollar. They have been unable to compete with the sharply falling costs of the mainstream silicon panel technology. TSMC was the latest company to give up on the thin film solar technology, after GE sold its Cd-Te operations to First Solar. Solar Frontier uses the CIS technology to make solar panels at its main 1000 MW factory in Japan. It recently opened another 150 MW factory in Japan as well. The company has been reasonably successful in the last couple of years. However, its cost structure is still higher than the more efficient silicon panels. The company says that it will cut costs to 40 cents/watt in the new factory. The current cost is 50 cent/watt, which is almost 25% higher than Trina Solar costs. First Solar is also producing panels at a much lower cost.
Solar Frontier like the other major Japanese solar panel companies have managed to survive by selling into their domestic market. Japan has remained more or less insulated to foreign companies and the prices are much higher than other markets. These companies have been totally outmaneuvered by Chinese and Taiwanese companies in other markets. Sharp has closed a number of factories in places like UK, Japan etc. Panasonic and Mitsubishi too have been contained to the Japanese market. They have almost a zero presence in growing markets such as China, India and USA.
Solar Frontier wants to break the mold by building a 1000 MW factory outside of Japan to serve foreign markets. The company is improving its cost structure and decreasing the time required to produce a panel. I remain skeptical of the potential success of Solar Frontier. The solar industry is a cutthroat one and requires an extremely thin cost structure. Japanese companies are known for their high costs and I don’t think they can compete in a commodity sector such as solar panels. However, I would be happy to see Solar Frontier succeed as it would add more variety to the technology being used as well as diversification in country supply.