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Lessons from Japan: How the Nation Can Supercharge Its Clean-Energy Economy

Two and a half years after the Fukushima disaster, all of Japan’s 50 nuclear reactors are offline. The nation’s total energy mix from nuclear power has dropped precipitously, from nuclear providing 11.3 percent in 2010 to just 0.7 percent in 2012, according to recently released data from Japan’s Ministry of Economy, Trade, & Industry. While Japan’s national government under Prime Minister Shinzo Abe would like to bring many of the nation’s nuclear plants back online, strong opposition from local prefectural governors and the public have put nuclear power’s future in a precarious position. Some of Japan’s plants will likely be brought back online — this past summer, two of the nation’s plants were operational, only recently shut down for maintenance ­— but not many. And new nuclear plants are pretty much off the table.

But, the country has a long way to go to ensure a robust non-nuclear, clean energy-powered future. In 2012, Japan’s total energy from renewables was just four percent, basically flat from the previous year and not up significantly from 1990, when it stood at 2.7 percent. Not exactly the type of growth needed to make a big dent. However, the numbers aren’t in for 2013 yet, and we should see a significant upswing in coming years as post-Fukushima commitments to renewables begin to kick in.

Indeed, recent clean-energy announcements coming out of Japan have been considerable, clearly positioning the country for leadership moving forward. Some of the most visible milestones include Japan becoming the fifth nation in the world to exceed 10 GW of installed cumulative solar PV power. Due primarily to the newly introduced feed-in tariff (FIT) which took effect in mid-2012, Japan stands to lead the world in new solar PV deployment with between five and seven GW of new installations in 2013.

Based on my business trip to Japan in late October, along with my experience living, working, and studying there in the mid to late 1980s, here are my topline thoughts on how Japan might supercharge its clean-energy economy:

1)   Provide Consistent Policy Support and Remove Barriers

To ensure that future goals are met, policymakers will need to guarantee consistent, long-term policies to enable rapid development and support innovation. In a country that has had six different prime ministers since 2008, ensuring this consistency is crucial to market development. To this end, a declining but well-understood FIT, along with clearly stated renewables targets, would go a long way to provide confidence to markets.

In addition, the nation must work to remove barriers and streamline processes to enable clean-energy deployment to flourish. Japan should work to remove barriers to third-party energy providers supplying solar and wind power to the grid, for example, without utility opposition. It should also embolden support for grid storage to help support renewables integration.  Taking a cue from across the Pacific, Japan should consider an energy storage mandate similar to the one recently forged in California

Softbank founder/CEO and Internet billionaire Masayoshi Son has been a vocal proponent for more renewables in Japan, offering up his own clean-energy plan and having his company invest in solar farms across the country. But "there's no point in working to generate solar power,” says Son, “if the utilities refuse to connect us."

2)   Enable Innovative Clean-Tech Business and Finance Models

Just as important as supportive policy will be the nation’s ability to foster private investment and deployment activity via innovative business and financing models. On this front, I think the U.S. has some important lessons to share with Japanese businesses. While Japanese and U.S. markets can act very differently, they also have a lot in common. Indeed, many of the models we’ve been perfecting in the U.S, from the “share economy” to leasing rather than selling solar PV systems, could go a long way in Japan and offer unique opportunities to companies on both sides of the Pacific.

Signs of this trend are already emerging. U.S.-based energy efficiency innovator OPower just announced a partnership with Japan’s Tokyo Electric Power Company (TEPCO), owners and operators of the beleaguered Fukushima Daichi nuclear plants, to extend its “big data” smart grid customer-centric platform to some of TEPCO’s 20 million customers.

3)   Focus on Established Expertise in Efficiency, Storage, Precision Manufacturing, and Advanced Vehicles

Japan has a deep, rich history in pushing the boundaries on “eco” innovation. For years, Japan led the world in solar PV deployment, and for decades has pushed the envelope on highly efficient appliances, energy-efficiency measures in buildings, and hybrid and electric vehicle technologies. 

Companies like Daikin and Fujitstu have led the charge in highly efficient heat pumps for heating and cooling. Toyota and Nissan are global leaders in HEVs and EVs respectively. PV manufacturer Solar Frontier is aiming to help regain Japan’s former solar glory, by developing highly efficient thin-film solutions. Panasonic, in addition to many other clean-tech sectors, is a global leader in energy storage, with Tesla using the firm’s lithium-ion batteries for its fleet.

While hybrids and mini-split inverters might seem like obvious objectives today, it was primarily Japanese companies that had the foresight to develop and nurture these technologies early on. In a country without fossil fuel resources and some of the world’s most expensive energy costs, efficiency in buildings, electronics, and transport has been a national mantra for decades. 

Moving forward, Japan should parlay these key areas of clean-tech expertise, where it already has a built-in advantage, into extended global leadership.

As a nation, Japan has a unique history of embracing the natural world in its art and culture, has been a global technology leader for more than half a century, and is severely resource-constrained, making the embrace of clean technology a natural fit. In the coming decade, I believe Japan can regain its title as an international clean-tech powerhouse, picking up on the many fruitful seeds sown in the 80s and 90s, and born more recently out of the misfortune and aftermath of Fukushima. By forging alliances across the Pacific, and building bridges among U.S. and Japanese corporations, local governments, and others, this should be a clear clean-tech win-win for both countries.

Lead image: Mt Fuji via Shutterstock

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