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Sunshine Solution For Showa Shell

Sunshine Solution For Showa Shell

Shu-Ching Jean Chen07.02.08, 3:15 AM ET


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HONG KONG –Showa Shell Sekiyu has grand designs for its fledgling clean energy business.

With gasoline sales falling, Japan’s fifth-largest oil refiner reportedly plans to build one of the world’s largest solar cell plants, with an annual production capacity of panels that would rival a small nuclear power plant.

The Japanese subsidiary of Royal Dutch Shell (nyse: RDSA – news – people ) confirmed Wednesday that it was looking into building a large-scale solar plant following various reports that it was planning to spend about 100 billion yen ($944 million) to build a factory capable of producing enough solar panels in a year to put out 1,000 megawatts of electricity. Showa Shell said in a statement to theTokyo Stock Exchange that it had not decided whether it will build the plant.

The factory could be sited outside of Japan in Europe and the Middle East, according to Japan’s Nikkei daily.

With silicon prices soaring, Showa Shell plans to make thin-film solar panels based on copper, indium and selenium, according to Nikkei, which added that the company will work with Ulvac, a vacuum technology company, to develop the technology needed for betterenergy efficiency.

With gas sales slumping in Japan due to the high price of oil, Showa Shell is hoping its solar cell business will provide it with growth. It has a factory with an annual capacity of 20 megawatts, and is currently building a second facility three times as big.

Showa Shell is joining Kyocera Corp. (nyse: KYO – news – people ), Sanyo Electric, Mitsubishi Electric Corp. (other-otc: MIELF – news people ) and Honda Motor (nyse: HMC – news – people ) in expanding solar cell production. Their efforts should receive a boost once Japanese government reintroduces subsidies and tax breaks for solar power in 2009 as planned.

Showa Shell shares rose 0.8% to 1,189 yen ($11.21). Its putative partner Ulvac added 1.9% to 3,830 yen ($36.11).

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