The World's #1 Renewable Energy Network for News, Information, and Companies.

Japan's Solar Market Poised for Return to Elite Status

Last year, the Japanese government announced the creation of a national feed-in tariff (FiT) for solar, joining Germany and China in creating robust public policy to drive deployment of renewable energy. The program is set to launch on July 1 and solar is regarded as one of the brightest spots in the Japanese recovery from the tsunami.

The new program will guarantee payment of 40 Yen/kWh ($0.50) for solar energy produced by projects >10kw (non-residential) and 42 Yen/kWh ($0.53) for energy from projects <10kw (residential) for twenty and ten years, respectively. Today, installed system prices in Japan far exceed global norms – 2011 system costs averaged about $6.25/w reflecting a high cost of regulation, grid connection, land, labor and construction costs in Japan as well as a module supply largely dominated by higher priced domestic manufacturers. Solar panel prices in 2011 ranged from 150 to 200Yen/watt ($1.90-2.70/w) which is almost twice what installers in the U.S. pay.

Analysts agree that the FiT is high and a revision is expected in March 2013, likely contemplating lower installation and panel costs as large scale system installers gain experience and lower cost imported modules capture a greater share of the market. Although the government expects the current FiT to create internal rate of returns of 6 percent for non-residential and 3 percent for residential systems, analysts predict higher returns as module competition increases. Domestic manufacturers like Panasonic, Kyocera and Sharp dominate the Japanese market today with strong brand recognition and good product reliability. SunPower, Suntech and Canadian Solar are the biggest non-domestic players, but other panel manufacturers like Trina Solar, Yingli Solar, and JA are positioning themselves to grab a piece of this increasingly important market.

Over the next few months, news rules are expected to reduce the cost, burden and delays associated with installing systems over 2MW. These changes as well as the new Energy Master Plan calling for 20-35% of energy generated by renewables is expected to accelerate Japan’s solar market. In 2011, approximately 1.3GW was installed and experts expect that number to grow to 2.3-2.5GW for 2012 and 3.0GW in 2013. Big box stores (like the U.S.’s Best Buy) are heralding the upcoming solar FiT tariff and enthusiasm for solar continues to grow. Longer term, Japan expects to have 28 GW of solar capacity installed by 2020 and 50 GW by 2030, making it among the top five global solar markets according to SolarBuzz.

And solar can’t get there soon enough… Following the nuclear disaster at Fukushima-Diachi, the Japanese nuclear program came under severe attack. Today, there are no working nuclear facilities in Japan, reducing the country’s energy generation capacity by 25 percent. With a hot summer looming, the Japanese expect significant power shortages to roll through the country. Solar is an excellent hedge against peak power spikes, since it produces the most energy during the heat of the day when air conditioning demand is highest.

A predicted steamy summer and the scheduled FiT reduction in March 2013 could “heat” up the Japanese solar market like we haven’t seen since the Italian market took off in 2010. Kampai!

RELATED ARTICLES

Canadian Climate Goals

Canada Announces Weak Climate Target

Danielle Droitsch, NRDC Last week, Canada has announced its contribution to the global effort to reduce greenhouse gases by announcing its post-2020 target. The target announced today is off-track to the 80 percent cut by 2050 they committed to in...
Renewable Energy Stocks

What Drives Alternative Energy Stocks?

Harris Roen, The Roen Financial Report Alternative energy became a serious market player after the turn of the millennium. Since that time, solar, wind, smart grid and other alternative energy stocks have experienced both strong up and down trends. The forces at...
Rooftop Solar Panels

Hypocrisy? While Buffett Champions Renewables, His Company Fights Rooftop Solar

Mark Chediak, Noah Buhayar and Margaret Newkirk, Bloomberg Warren Buffett highlights how his Berkshire Hathaway Inc. utilities make massive investments in renewable energy. Meanwhile, in Nevada, the company is fighting a plan that would encourage more residents to use green power.
Japan Microgrid

Born from Disaster: Japan Establishes First Microgrid Community

Junko Movellan, Correspondent Although Japan's Fukushima prefecture is most commonly associated with the 2011 disaster due to the nuclear power melt-down, Miyazaki prefecture, located north of Fukushima, suffered from the largest death toll, close to 10...
Cathy is responsible for crafting and articulating Applied’s energy policy strategy for energy efficiency solutions, energy generation and energy storage, all of which Applied is accelerating with its nanomanufacturing expertise. She also leads Ap...

CURRENT MAGAZINE ISSUE

03/01/2015
Volume 18, Issue 3
file

STAY CONNECTED

To register for our free
e-Newsletters, subscribe today:

SOCIAL ACTIVITY

Tweet the Editors! @megcichon @jennrunyon

FEATURED PARTNERS



EVENTS

EU PVSEC 2015 (European PV Solar Energy Conference and Exhibition)

The EU PVSEC is the largest international Conference for Photovoltaic re...

Sponsor/Exhibitor: MIREC Week 2015

Solectria, Pillar, and Variadores together are co-Silver Sponsors! Come ...

More Power, More Profit Tour - San Diego

Register for the SMA More Power, More Profit Tour for free, in-person sa...

COMPANY BLOGS

EU PVSEC 2014: Call for Papers Receives Great Response

More than 1,500 contributions apply for presentation in AmsterdamScienti...

EU PVSEC 2014 extends its Scope

Added focus on application and policy topicsAbstracts for conference con...

Boulder County Residents Generate Their Own Energy with Community S...

Despite a soggy afternoon, solar energy advocates gathered at ...

NEWSLETTERS

Renewable Energy: Subscribe Now

Solar Energy: Subscribe Now

Wind Energy: Subscribe Now

Geothermal Energy: Subscribe Now

Bioenergy: Subscribe Now  

 

FEATURED PARTNERS