Solar Gets Big Boost in China, Japanese Giants Discuss Partnership
Struggling Asian markets found reason to rally recently when China’s leaders announced immediate incentives for large scale solar power. On top of that, electronics giants Sharp (also the world’s second largest solar cell maker) and Toshiba are poised to team up to reap those benefits. China’s immediate embrace of subsidized solar power, combined with the prospect of two superpowers joining forces, was enough to send troubled Nikkei stocks in an upward direction.
The Incentive
In China, the average solar installation goes for $5 to $7 per watt. Effective immediately, the Chinese government will fund roughly $3 per watt for solar systems larger than 50 kilowatts. So even as I write and you read, Chinese power producers can enjoy about a 40-60 percent discount on their large solar systems.
The Partnership?
In related news, which also sent a few stocks upward, Sharp and Toshiba are at least talking about a solar power partnership. This potential alliance would reportedly consist of Toshiba providing electricity distribution systems to Sharp, with Sharp providing solar panels to Toshiba.
Both companies have denied that any type of deal has been struck. They admit meeting with each other but claim many other firms are included in the search as well. Still, the news that these two giants were even considering a partnership was enough send gossip running and stocks higher.
Last Friday, Sharp’s Nikkei shares rose 4.5 percent and Toshiba’s 1.5 percent, outperforming the rest of the market, likely on partnership rumors. Both companies have been hit hard by the global economic slump. Sharp, which is already a world leader in solar panel manufacturing, is looking to enhance its solar operations, while Toshiba, which has little experience in the solar industry but has plenty with electricity distribution systems and batteries, is looking to solar power for recovery.
This new and very generous subsidy could boost China’s solar capacity by 10 times, a prospect that local heavyweights such as China’s Suntech, Yingli, Solarfun, and international players like Sharp and Toshiba are very much looking forward to, partnership or no.
Posted on April 7th in Solar News by Dan.