Panasonic Corp. said its solar-panel operation will probably remain profitable amid growing demand from domestic homeowners.
Shipments in February reached a record level as the nation’s feed-in-tariff system for electricity triggered demand for rooftop systems, Kazuhiro Yoshida, who heads the business, said in Tokyo on Monday, declining to elaborate.
Panasonic is targeting Japanese individuals for its HIT-brand solar cells, a strategy that has helped preserve profitability and protect the business from a glut in commercial production, he said. The Osaka-based company is focusing on premium products for residential users as an oversupply in large-scale facilities led to price declines and threatened the survival of Suntech Power Holdings Co., once the biggest solar-panel maker, he said.
“Demand is booming in Japan,” Yoshida said, “It is not our goal to become the No. 1 company. Our focus is how to be profitable.”
Japan is one of the few bright spots among established solar markets globally where a supply glut dragged down panel prices 25 percent in the past year amid declining demand from Europe as governments cut subsidies.
Japan added 1,119 megawatts of solar energy capacity in the nine months that ended Dec. 31 to the 4,800 megawatts already installed, the Ministry of Economy, Trade and Industry said March 13. The country will probably be one of the top three markets this year, according to Bloomberg New Energy Finance.
A committee of experts advising METI this month recommended the price paid for solar power should be cut beginning April 1.
Even at the reduced rates, Japan’s support for solar is about three times the incentives offered in Germany and China, two countries that are among the biggest markets for the technology.
Suntech Power, based in Wuxi, China, became the solar industry’s biggest corporate failure this month, while Robert Bosch GmbH, the largest car parts maker, abandoned a near $2.6 billion foray into solar-power equipment.
Panasonic started shipping solar devices from its new plant in Malaysia this year, as part of its efforts to reduce production costs by 20 percent, Yoshida said. The company also makes solar cells at two domestic factories and modules at a plant in Hungary.
The electronics maker may boost its production of solar panels by about 30 percent in the year starting April 1 because of the government incentives, Yoshida said in June, without providing a shipment target.
Margins for the solar business are currently between 5 percent and 10 percent, Yoshida said Monday. The company is aiming for a 10 percent operating margin for the business, he said.
President Kazuhiro Tsuga is set to brief reporters Thursday on a business plan that includes measures to revamp the company.
Panasonic, which is losing money in televisions and mobile phones, is projected to return to net income of ¥80.5 billion in the 12 months starting April 1, compared with a forecast net loss of ¥745 billion this fiscal year, according to the average of 16 analysts’ estimates compiled by Bloomberg.