An Oil Company Finally Opts to Go Green

It’s not a major company like BP, Exxon, or Shell — although it’s about 40 percent owned by the last. But Showa Shell Sekiyu, a refiner in Japan, may still count as the first example of an oil company staking its future (not just a tiny percentage of profits) on renewable energy.

Showa is looking to invest about $1.1 billion (more than two years’ profits) in a solar cell factory in southern Japan, boosting its output tenfold to 900 megawatts, according to Bloomberg. The investment would probably cost more, but the plant is one acquired from Hitachi, allowing Showa to re-use some technology.

The plant will make low-efficiency thin-film solar panels, so Reuters is billing the move as competition for First Solar. Showa may indeed be on competing in price, but it looks like the company actually wants to find its own markets.

One of those is the Japanese auto market. A few weeks ago, Showa announced a deal with Nissan to make quick-charge stations for the all-electric Nissan Leaf. That’s an unusual vote of confidence in the future of electric cars, at least for a company that operates gas filling stations.

Showa will also make solar panels for use in small developments like schools and hospitals by Saudi Aramco, the national oil company of Saudi Arabia, which has a 10 percent stake in Showa.

Shares of Showa immediately rose on the Nikkei stock exchange after the announcement — an odd detail, considering that the stocks of pure solar companies have been declining as the market gets more competitive.

And it seems like a bad time for a relative newcomer to try to expand their market share. But with Japan promising to hit more stringent renewable energy targets, Showa probably sees room for growth in the local market. If they’re wrong, they may still be able to spin off their bad bet.