Sunlight has been used directly to generate electricity for more than 50 years, based on the principle of photovoltaics (PV, literally 'light electricity'), which was discovered in 1839 by French physicist Edmond Becquerel. The technical progression of this phenomenon stalled for many years subsequently, but from the late 1950s PV technology began to be developed as a viable source of electric power. With a succession of R&D breakthroughs, the efficiency and viability of solar power technology began to accelerate. In 1955 the first PV cells converted sunlight to electric power at an efficiency rate of 2%; the Explorer-6 spacecraft launched in 1959 was powered by cells with 10% efficiency; and by 1960 efficiency rates of 14% had been achieved.

Fast forward to 2008, and cells are now commercially available with efficiency rates of around 22%, with production costs many times lower than previous generation cells. Solar cells are everywhere-not only in calculators and other familiar small appliances, but now also in large-scale, dedicated 'solar farms' of 20MW or more, generating grid-linked power around the world.

Despite this progress, the development of solar power as part of social infrastructure is still only in its infancy compared to conventional hydrocarbon or hydroelectric power sources. The potential for a substantial new stage of growth has never been greater, and with the hunt for sustainable energy gaining impetus worldwide, Mitsui has created a dedicated division to pursue a long-term vision for solar power business development.

A megawatt-scale power generation site using thin-film PV modules

Mitsui first became involved in the solar power business around ten years ago, and since then Mitsui's solar power operations have expanded to include many parts of the value chain, including sales of PV cell raw materials, modules and systems, and investment in PV power generating facilities. In 2006, Mitsui acquired SunWize Technologies ("SunWize"), one of North America's leading solar power companies and a specialist in the design and manufacture of integrated PV power systems.

Now, with the establishment of the Renewable Energy Division on June 1, 2008, Mitsui has brought together personnel and resources from the solar power-related activities of four business units. The division's mission is to develop Mitsui's solar power business over the long term, and by pursuing business in under-developed upstream, midstream and downstream parts of the value chain, Mitsui aims to create a comprehensive, responsive and profitable operation that can contribute to Mitsui & Co.'s business and to a future of sustainable energy.

Mitsui is engaged along the entire solar power value chain

Solar power offers numerous benefits. The systems themselves are low maintenance with no moving parts, they maintain high generating efficiency over periods in excess of 30 years, and the local production of power means there is no significant transmission loss. PV cells produce zero CO2 emissions after installation, which helps countries meet Kyoto Protocol emissions targets, and the sun itself offers perhaps the ultimate in sustainability-with an estimated life of billions of years.

At the same time, other characteristics of solar power require sophisticated management. The most obvious is that PV cells cannot produce power around the clock, and their output is reduced in cloudy weather conditions. For this reason, the development of solar power technology for many situations has been closely tied to the development of battery technology. As battery storage technology improves, the scope of applications for solar power will grow. In the meantime, many countries have mechanisms that enable even private homes to sell excess power to the grid.

A second challenge to the more widespread emergence of solar power is cost. The cost of power generated from PV cells is ultimately a function of conversion efficiency (how much of the received sunlight can be harnessed as power) and manufacturing process (what kind of raw materials need to be sourced, processed and assembled). As mentioned earlier, PV cell efficiency has more than doubled over the past 50 years. The substrates used have also changed, and third-generation organic PV cells offer potential for dramatically cheaper production and higher conversion efficiency. Costs are already coming down as the size of the market increases. For now, however, the cost of power produced from PV cells is approximately double that of conventional grid power, and best estimates are that parity with grid prices may not be achieved until around 2015-2020.

These two challenges, along with other characteristics of solar power, mean that Mitsui has no illusions of PV cells being the ultimate sustainable energy solution. Rather, solar power will continue to emerge as an integral, economically viable element of an increasingly diverse, sustainable and environmentally sensitive power infrastructure

The planned Haneda International Airport terminal

The market for solar power is growing at 30-40% per year, and the abundance of untapped potential offers appealing opportunities even at the current level of technology.

Mitsui's initial focus will be on developing its midstream business in the area of PV modules and related hardware, before moving closer to retail customers in the downstream area. Ultimately, Mitsui envisages building on the capabilities and experience of SunWize in North America to offer total energy solutions for housing and industrial systems, commercial premises, and other situations requiring energy efficiency-in both energy production and energy consumption. Mitsui is already participating in innovative, multi-party business structures such as the mechanism developed for the new Haneda Airport passenger and cargo terminal in Tokyo. This rooftop solar power system will be the first time a power company in Japan has produced power on another company's premises, and points to a collaborative power generation business model with enormous potential.

New opportunities for solar power continue to arise, with intensive R&D taking place worldwide in tandem with the emergence of new consumer technology such as plug-in hybrid vehicles. New applications for PV electricity generation, including transparent roofing sheets and even everyday clothing, are changing people's perceptions of what is possible, and opening the door to new business opportunities.

From small beginnings, solar power is stepping out of the shadows and becoming a more prominent feature in our lifestyles and landscapes. Mitsui, through its core team in the Renewable Energy Division and supported by other business units, is committed to helping solar power take its place in the sun.

The posted information is as of the date of issuance. The information may change without notification.