Wed, Jun 25, 2008 - Page 12 News List

Stocks of solar cell makers get a lift from Japan policy

OpportunitiesTokyo’s plan to offer subsidies and tax breaks next year to encourage households to install solar panels sent local solar shares soaring

By Chinmei Sung and Shigeru Sato  /  BLOOMBERG

Motech Industries Inc (茂迪) led shares of Taiwanese solar cell makers higher in Taipei trading yesterday after Japan said it planned to offer subsidies and tax breaks to encourage households to install more solar panels.

Motech, the nation’s biggest solar cell maker, jumped 6 percent to close at NT$249, its biggest gain since May 5, on the over-the-counter GRETAI Securities Market. Gintech Energy Corp (昱晶能源), the No. 2 maker, advanced 1.8 percent to NT$231.50, while E-Ton Solar Tech Co (益通光能) climbed 5.2 percent to NT$378.

Solar cells are made from silicon wafers and are used to convert sunlight into electricity.

Japan plans to offer subsidies and tax breaks as early as next year to encourage households to install solar panels as part of efforts to cut greenhouse gases.

The government will also promote the use of biofuels, geothermal energy and hydrogen fuel by oil refiners and gas companies, a trade ministry committee said in a statement released in Tokyo yesterday.

Japanese Prime Minister Yasuo Fukuda announced on June 9 that Japan aims to reduce gases blamed for global warming by as much as 80 percent by 2050. Japan plans to boost installation of solar panels tenfold by 2020.

Details of how much the government will pay for the incentives have yet to be worked out. The committee estimates the cost of installing panels is ¥2.3 million (US$21,300) per household. It predicts the cost will halve in five years because subsidies will boost demand and spur competition, bringing down prices.

Between 1994 and 2005, Japan provided as much as ¥70,000 to households in subsidies for installing solar panels. A revival would help kick-start the industry, which had a setback when the subsidies ended, the report said.

Japan’s greenhouse emissions rose 6.2 percent in the year ended March last year from the level in 1990, the environment ministry said.

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