Domestic IT service companies are keeping their eyes on the sharp rise of the Japanese solar energy market.
According to sources in the industry on August 18, LG CNS, SK C&C, Hanwha S&C, and other IT service companies are trying to come up with ways to enter the Japanese solar energy market with quick investment expansion.
These companies believe they are ready to develop and create renewable energy solutions, and are reviewing the business value of prospective projects in which they can participate.
The Japanese government is expanding investment in solar energy as a replacement energy source and its next growth engine, since the big earthquake which hit Japan in March 2011 stopped the operation of 51 nuclear power plants and made the country’s power supply unstable.
KOTRA predicts the Japanese solar energy market to grow to 22 trillion won (US$19.8 billion), which is 77% higher than last year. From the new facilities, Japan will see an increase of 530 megawatts (MW), which is 2.2 times more than last year.
The particular project that the domestic IT service companies are paying attention to is the “Mega Solar Project.” This project, which requires a minimum of 10 billion yen (114 billion won, US$102 million) worth of financial resources, is about producing and providing solar energy via the local government lending the physical location to participating general trading companies, solar battery businesses, constructors, and electric power companies.
Currently, 85 Mega Solar Projects are taking place across Japan and will continue through to the year 2030. Thus, domestic IT service companies such as LG CNS, SK C&C, Hanwha S&C, and others expect that they will be able to play a role in constructing the power system, operation, management, or other items related to the project.
LG CNS has constructed several domestic solar energy plants, as well as internationally in Sri Lanka, Bulgaria, and the Philippines. An LG CNS associate said, "The company has a lot of expertise, as it is the first in the nation with accumulative experience in domestic solar energy plant construction,” and added, “It is undergoing pre-business stages, and will participate as soon as an appropriate project comes up.”
Hanwha S&C also expects to play a part in the construction, operation, and management roles of the power generating system, since Hanwha Group is actively participating in the Japanese solar energy business. Last year, Hanwha Group bought out the German solar battery module company Q.CELLS. And this year, it plans to expand business by shipping 8 times the solar batteries to Japan that it shipped last year.
SK C&C is also interested in entering the Japanese solar energy market. An SK C&C associate said, “The business operation division has determined the Japanese solar energy business to be meaningful, and continues to watch carefully,” and added, “Although it is hard to say that the company will participate in the business right away, it is true that the division is continuously analyzing business value.”
A KOTRA associate said, "Domestic IT service companies will most likely participate as a system construction partner,” and added, “In order for the companies to successfully enter the market and make any progress in Japan, they must cooperate with Japanese solar panel companies and secure cheap construction expertise first.”