Mitsubishi's New Solar Cell Plant in Japan Set to Triple Production

In a statement of confidence for its industry, the Mitsubishi Electric Company (TYO:6503) -- one of the world's largest solar panel producers--recently completed construction on its new solar cell plant in Nagano Prefecture, Japan.

Along with this news comes plans to almost triple production of solar cells in two years to meet demand for renewable energy.

Mitsubishi Electric joins First Solar Inc. (Nasdaq:FSLR), the world’s largest maker of thin-film solar modules, and Sharp Corporation (TYO:6753) in raising capacity as governments offer subsidies to encourage households and businesses to move away from the fossil fuels.

New Plant Means New Tech:

Mitsubishi also announced plans to start production of monocrystalline silicon photovoltaic (PV) cells within 2010. An often higher-priced but more efficient means of solar energy production, the initial conversion efficiency of the monocrystalline silicon PV cell is expected to be 17%, but the company plans to enhance it to 18 to 20% as soon as possible to compete with its rivals.

Mitsubishi considers its years of work and research in polycrystalline photovoltaic cells to be more than adequate for a move to monocrystalline.

"We have been engaged in the research and development of monocrystalline silicon PV cells for some time," Mitsubishi Electric said. "We do not think there is a clear difference between the technologies for monocrystalline silicon PV cells and those for polycrystalline silicon PV cells."

The 258,000 square foot plant is expected to begin production next year, initially raising module production capacity 220-megawatts to 270 MW before scaling up to support the company's plans to deliver 600 MW of annual capacity by 2012.

Will It Help the Industry?

Though Mitsubishi is confident in projected growths of the solar market, many analysts are skeptical.

The solar market is continuing to face conflicting signals over its outlook, with analysts insisting that while long-term prospects look healthy, there are risks that the sector could be badly hit by planned cuts to incentive schemes in Germany and Italy.

Mitsubishi insists the global market for photovoltaic cells will climb from 5,500 megawatts in March 2009 to 8,000 megawatts in 2012. "The introduction of new PV-related stimulus programs in Japan, feed-in-tariff systems spreading across Europe, as well as projected growth in the North American market", would all serve to drive demand the company says.

By that estimate, the capacity target Mitsubishi has announced would give it 7.5 percent of the total global capacity.

Mitsubishi’s solar-panel business made 54 billion yen ($607 million) in sales in the year ended March 31, 2009.

“Our lines are running at full capacity, 24 hours a day,” Jun Nagasawa, general manager of Mitsubishi Electric’s solar division, said at a recent press briefing in Tokyo. “We think this momentum will continue through fiscal 2010 and we’ll be watching to see the direction of government subsidies.”

Nagasawa declined to say how much revenue the planned expansion may generate. However, global revenue from the cells are expected to climb to $90 billion in 2013 from $20 billion in 2009, according to market researcher iSuppli Corp.

Sources: Business Week. Tech-On, and Business Green