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Solar-panel producers stand to benefit from nuke fears

Let it shine: Solar panels manufactured by Sharp Corporation make electricity at Kansai Electric Power Company’s mega solar power station in Sakai, Osaka Prefecture, in October.BLOOMBERG

Akiko Hirai says the Hamaoka power station three kilometres from her home evokes such dread of the crippled Fukushima plant that she would spend 500,000 yen installing solar panels if it helped make Japan nuclear-free.“Who can really guarantee that they’re 100 per cent safe? I want nuclear plants to be halted if they’re so frail,” said the 53-year-old housewife, who has lived in Shizuoka Prefecture for more than 20 years. “It’s not that I’m worried about myself, it’s my daughter and other small children I’m concerned about.” Hirai helps illustrate Japan’s growing antinuclear movement in the wake of the world’s biggest nuclear accident since Chernobyl. That’s creating an opportunity for makers of solar equipment, such as Panasonic Corporation and Sharp Corporation to capitalise on orders that analysts estimate may exceed US$100 billion over the next decade, bringing down costs for consumers. “It’s become clear we can’t keep relying on nuclear power or fossil fuels,” said Koji Toda, chief fund manager at Resona Bank Ltd. in Tokyo. “Still, solar power is too expensive for the market to bloom without subsidies. It’s easy to agree on the big picture but not so easy to determine who pays the price.”

Toshiba Corporation and Hitachi Ltd, Japan’s two largest makers of nuclear reactors, have underperformed Japan’s Topix index, while shares of Panasonic and Sharp have outperformed the benchmark since last month’s natural disaster. Last June, Japan laid out plans to build nine atomic reactors by 2020 and at least five more the following decade to increase the nation’s portion of nuclear energy to 50 per cent of overall power generation by 2030 from 29 per cent in 2009. Prime Minister Naoto Kan said March 31 the country needs to revise those policies. That means Japan will probably step up a campaign to encourage the use of solar cells for years at the expense of atomic power, Takashi Watanabe, a Tokyo-based analyst at Goldman Sachs Group Inc, wrote in an April 1 report. Solar may be the strongest option because of restrictions on where wind and thermoelectric power stations can be built, he said. Replacing the proposed nuclear plants with solar ones would require 108 gigawatts of photovoltaic generation by 2020, according to Goldman Sachs. Based on the current estimated costs of solar cells, that capacity would cost more than US$150 billion.

Solar-panel prices will likely fall to US$1.50 per watt in the second half of 2011 from about US$1.80 in 2010, Jenny Chase, a solar analyst for Bloomberg New Energy Finance, said March 29. Panasonic and Sharp, Japan’s biggest maker of solar panels, would benefit from increased domestic adoption of the technology as the companies earn about half of their solar-panel revenue from Japan, Watanabe said. The strength of their brands and relations with home builders would also help the Japanese companies against Chinese solar companies, he said. “Interest in solar power and other alternative energy sources will probably rise further,” said Akihiko Oiwa, a spokesman for Sanyo Electric Co, Panasonic’s solar-panel unit. Politicians may help. Gov Yuji Kuroiwa held a 90-cm solar panel on the streets of Kanagawa Prefecture this month as he pledged to install solar panels to support as many as two million households. Kanagawa will “kick off the revolution” to end Japan’s dependency on nuclear power, Kuroiwa said April 11, the day after the former journalist drew twice as many votes as his opponent in the election.

On the same day in Shizuoka Prefecture, Governor Heita Kawakatsu said he aims to make Shizuoka the top municipality in terms of the rate of solar-panel use. Kawakatsu plans to reduce Shizuoka’s reliance on nuclear energy from 80 per cent by providing subsidies for consumers and funding research that could improve the efficiency of photovoltaic power. Reactors at Tokyo Electric Power Company’s Kashiwazaki-Kariwa plant have been halted since an earthquake hit the plant in 2007 and caused radiation to leak.
Japan isn’t alone in reviewing its nuclear plans since the March 11 earthquake and tsunami knocked out cooling equipment at Tepco’s Fukushima No 1 power plant, leading to the evacuation of hundreds of thousands of inhabitants. The US started a 90-day review of domestic nuclear safety last month. German Chancellor Angela Merkel on March 15 ordered the idling of the country’s seven oldest reactors pending safety checks. Italy extended a moratorium April 20 for its nuclear projects indefinitely. China, the world’s biggest energy consumer, will cut its 2020 target for nuclear power capacity and build more solar farms following Japan’s atomic crisis, an official at the National Development and Reform Commission said last month. Germany may increase its annual solar installation target to 5 gigawatts from the current 3.5 gigawatts, according to estimates at research firm IHS ISuppli. Bloomberg

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