Kyocera Corp, fighting to hold its own in a competitive solar panel market, is banking on a revival of Japanese subsidies to bolster sales, and said orders for its panels in Japan have jumped this year.
Kyocera, which has been losing market share amid price competition with rivals Q-Cells, First Solar and Suntech, has also seen a slight recovery in orders for its solar panels in Europe, its president said on Friday.
Japan is also home to Sharp Corp and Sanyo Electric Co, which along with Kyocera are pioneers in solar panels, but the market remains small amid on-again, off-again state support for the technology.
There's a strong tailwind in Japan, Kyocera President Tetsuo Kuba told Reuters in an interview. This year (the strength of orders) is completely different.
In January, the Japanese government introduced a subsidy of 70,000 yen ($723) per kilowatt of solar panel equipment and aims next year to guarantee prices for surplus electricity produced by home solar panels.
The Kyoto-based firm logged an annual 50 percent rise in the number of orders in Japan for household solar panels in January to April.
Still, that is not nearly enough to make up for a sharp fall in orders from Europe's solar power generation plants, after Germany and Spain cut their solar subsidies.
Orders in Europe are now recovering a little for Kyocera, which is the world's sixth-biggest solar cell maker according to market researcher PV News, mostly from households and companies, Kuba said.
Kyocera, for which electronics components account for half its revenues, aims to expand market share in Japan by selling its panels at retailer Aeon Co Ltd's shopping centers and shore up its brand by supplying panels for Toyota Motor Corp's Prius hybrid car.
Kyocera has no concrete plans now to supply solar panels to other automakers but would not rule out such a move in the future, Kuba said.
The company, which has been cautious about expanding panel production, expects its fine ceramic applications segment, which includes solar cells, to post a 35 percent fall in profit on a 9 percent drop in sales in the year to next March.
It will likely spend the bulk of its planned 43 billion yen in capital expenditures for the year to March on its solar panels, he said.
SOLAR BRIGHT, ALL ELSE BLEAK
Sales of Kyocera's mainstay electronic components are rising in April-June and are expected to keep increasing slightly as mobile phone and flat TV makers restock on ceramic capacitors and other parts that control the flow of electricity in gadgets.
But Kyocera, which also makes cellphones, said it was too early to call a recovery yet, with Kuba saying that quarterly rises in orders could hit a lull in the autumn.
So far, there are no signs that demand for industrial electronics used to make semiconductors and cars will return to pick up the slack, he said.
Kyocera forecasts operating profit to be flat, at 44 billion yen in the year to March on an 8 percent decline in sales. But 19 analysts on average expect the firm to earn 24.5 billion yen, half the target, according to Thomson Reuters.
Shares of Kyocera closed unchanged at 7,220 yen, while Sharp fell 1.1 percent and Sanyo lost 4.1 percent.
(Reporting by Mayumi Negishi and Reiji Murai; Editing by Chris Gallagher)