BANGKOK -- Japan's solar power business is not as appealing as it once was. The price utilities have to pay for electricity harnessed from the sun has declined. But Thai businesses are still finding opportunities there.
One of these companies, SPCG, on Tuesday announced plans to join a mega solar power plant project in the Northeast Asian nation. Chief Executive Wandee Khunchornyakong told reporters here that the low prices Japanese utilities pay could be offset by declining construction costs in Japan. "We can expect a profit," she said.
The project was initially launched by Kyocera TCL Solar, a joint venture between Japan's Kyocera and Century Tokyo Leasing. Construction at a site in Tottori Prefecture, western Japan, began in September.
The facility, expected to be capable of putting out 30 megawatts with Kyocera-made solar panels, is slated to be in full operation by 2018. The electricity is to be sold to Chugoku Electric Power at 36 yen (31 cents) per kilowatt for up to 20 years.
SPCG's investment will cover roughly 30% of the project's $85.8 million cost. The Thai business is eager to tie up with Kyocera on similar solar projects.
Japanese businesses hesitate in front of Japan's solar power market, but Thai enterprises see attractive opportunities for new revenue sources in the country.
An incentive is that the rates Japanese utilities still have to pay for solar watts are higher than those in Thailand. Mega solar farms in the Southeast Asian country can currently get 5.66 baht (16 cents) per kilowatt on a 25-year contract. This is about 10% less than in 2014 and roughly half Japan's current rates.
Gunkul Engineering, a Thai power systems builder, arrived in Japan ahead of SPCG. Gunkul and its Japanese partners are constructing solar farms capable of putting out 30MW in Chiba Prefecture, near Tokyo, and Miyagi Prefecture, in northeastern Japan. The company is to spend as much as 3.5 billion baht on each location.
Bangchak Petroleum earlier this month said it has agreed with U.S. based SunEdison to acquire SunEdison's entire solar power business in Japan for roughly $82.5 million. The Thai oil retailer has also established an investment company with the Provincial Electricity Authority of Thailand and other partners that will only put money into solar power projects in Japan.
The partners plan to construct and operate mega solar farms in the country with output capacities of 50MW or so.
Banpu, a leading coal miner in Thailand, is also involved in solar farming in Japan, where it has plants with outputs in the 10MW range.
Other Thai startups and businesses have unveiled plans to enter Japan's solar power market. But caveat emptor: The rates power utilities have to pay for what solar plants generate could fall further.