Sumitomo prefers wind over solar power

Sumitomo will add wind farms and at least two biomass plants to take advantage of the market rates for electricity from renewable sources the government introduced in July.

Sumitomo's utility, Summit Energy Corp., expects profits from wind power to triple in as many years, according to the unit's president, Shinichi Kitamura.

The group's focus is in part a response to a rush into solar projects that is pushing up land prices and salaries, and luring investors from pachinko parlor operators to asset managers. While government data show

Japan can build wind farms at a cheaper price and with higher returns than solar facilities, 99 percent of applications for the new tariffs are for electricity generated from sunlight.

"With so many companies rushing in we are seeing a solar bubble forming and land prices are rising," said Kitamura

Japan's ambitions in renewable energies look more manageable in wind power, he added.

Geothermal projects, meanwhile, can take as long as a decade to develop, Summit Energy's Kitamura said.

In the first two months of the feed-in tariff, applications for 155 solar projects with a capacity of at least 1 megawatt were filed, but only 14 for wind power and one for biomass, government data show.

Sumitomo decided against investing in some advanced stage solar projects because of rising costs, Kitamura pointed out.

The company operates domestic two wind farms and three thermal generators, one of which can burn biomass.

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