MEMC SunEdison Stakes out $4.6 Billion in Solar Power Projects as Japan Readies Feed-In Tariff

Photo courtesy SunEdison

While government renewable energy incentives are in danger of being cut, eliminated, or allowed to lapse in some key markets, such as Germany and the US, they are on the rise in others. The shifting industry landscape has solar power industry players hustling and jockeying to establish positions in promising emerging markets.

Hit hard by the double tsunami and nuclear power plant disasters in Fukushima, Japan’s parliament, in late August, passed landmark national feed-in tariff (FiT) legislation that requires electric utilities to pay subsidized, above-market rates for electricity produced from wind, solar, and geothermal energy.

Japan FiT Spurs A Beehive of Solar and Renewable Energy Activity

Due to go into effect on July 1, the details of the rate subsidies haven’t been fully settled, but the numbers being bandied about — the equivalent of 50 cents per kilowatt-hour for electricity generated via solar photovoltaic (PV) systems and 25 cents per kilowatt-hour for electricity from wind energy — “virtually assures Japan will catapult up the global ranks of active renewable energy economies after lagging behind leaders Germany, Italy, China and Ontario, Canada,” commented Jim Pierobon of the Energy Collective in an October 4 post.

News of Japan passing the FiT has generated a veritable beehive of activity, prompting domestic and foreign solar power industry players to ramp up project development and investment plans.

SunEdison, the ‘downstream’ subsidiary of MEMC Electronic Materials, today announced plans to invest an initial 350 billion yen ($4.6 billion) to build solar power plants in Japan over a five-year period, according to a Bloomberg News report. MEMC is the US’ second-largest producer of polysilicon, the raw material used in fabricating solar PV wafers and cells.

A spokeswoman for SunEdison Japan confirmed that the company is discussing potential project sites for solar power plants with a total capacity of 1-gigawatt (GW) within local governments in Japan’s Niigata and Fukuoka prefectures.

Global Solar PV: Ructions and Restructurings

Ructions in the global market for solar PV technology have prompted solar power industry participants across the value chain to reassess and realign their businesses and strategies, and MEMC is no exception.

Management, in early December, announced a restructuring of its operations that includes laying off more than 1,300 employees across its global operations — approximately 250 in the US — adjustments to its production capacity and an accelerated cost-cutting in 2012 and beyond. A charge against earnings of some $700 million is expected to be taken in its 4Q 2011 accounting, approximately $520 million of which is expected to be non-cash. The actions are expected to result in cash flow benefits of more than $200 million by the end of 2012.

MEMC is cutting back polysilicon production by idling its 6,000-metric ton facility in Merano, Italy and may shut it down permanently “unless dramatic feedstock, power, and other cost reductions are achieved in the near term,” management stated. Production is also being reduced at its silicon crystal manufacturing facility in Portland, Oregon and is capping capacity development at its silicon wafer facility in Kuching, Malaysia at 300-MW.

With regard to its ‘downstream’ operations, MEMC is consolidating SunEdison and its internal Solar Materials business units into a single Solar Energy business unit, a change that went into effect January 1.