Most of the projections we've seen for 2013's biggest solar markets (Solarbuzz, IHS iSuppli, Deutsche Bank) put Japan as #4 behind China, the US, and Germany, and ahead of a number of countries led by Italy. Maxim Group and Lux Research have Japan squeaking into third place. But now, one analyst sees Japan's solar market surging in 2013 to an eye-popping 5 GW -- raising questions whether the nation, like others before it (think Spain) is overheating.
IMS Research (owned by IHS, as is iSuppli) predicts over 1 GW of installations in Japan from January through March, setting the stage for a full-year total exceeding 5 GW. That would leapfrog Japan into the No. 2 spot of global PV markets, ahead of the US, Germany, and Italy. That's also nearly the same amount Japan added over the previous three quarters combined.
Timing appears to be the key to Japan's ascension. Its current feed-in tariff of ¥42/kilowatt-hour (kWh) "is by far the most attractive globally overly generous," points out Ash Sharma, senior director of solar research at IHS. China and Japan led a big surge in global PV capacity (an estimated 10.1 GW) in the final quarter of 2013. But with Japan's fiscal year ending in March there's been an extra couple of months of activity before the FiT is expected to be reduced. And that reduction, widely anticipated at 10 percent, is still pretty generous, and probably won't significantly impact internal rates of return (IRR) and market demand.
Several trends in Japan are worth noting, according to Sharma. Amid the boon, Japanese PV companies are still able to obtain high margins for domestic business, for everything from modules to inverters to EPC services and residential "system kits," due to customers' preference for domestic products and stringent regulations from both certification boards and utilities.
Meanwhile, "mega-solar" projects (≥2 MW) which have largely been driving Japan's high growth will wane after this year, Sharma predicts, because beyond the current pipeline there's a shortage of land available for new ones. On the other hand, commercial rooftops (10-50 kW) "are in very high demand in Japan due to high incentives, high electricity prices, power shortages for commercial properties and relatively simple regulations for installations of this size," he says.
IN THE NEWS
China May Cut Subsidy for Largest Solar Projects: China reportedly is eyeing new policies that would favor smaller projects over larger ones to promote new plants in in areas with power shortages. This, as the Suntech saga continues to play out (see below). Chinese solar firms are trying to put a positive spin on potential consolidation, but investors seem weary of persistent market softness.
India Widens Solar Capacity Auction: India plans to tender 750 MW of solar energy capacity to kick off the second phase of its National Solar Mission, and expects to auction more than the 1.6 GW for the year through March 2014. Of the 350 MW awarded in the NSM's first phase in December 2011, 340 MW met financing deadlines but only 260 MW have been completed.
Suntech Saga Continues: Facing a March 15 deadline for repayment of $541 million in bonds, Suntech got an extension from a majority of its shareholders -- but not all of them. And so the company's fate is uncertain, whether bankruptcy or state-level bailout, and in what form of reorganization to save the world's biggest solar panel maker. In case you were wondering, the fallout from Suntech's turmoil does indeed extend to Wall Street.
Can Solar Energy Save the Taj Mahal? The Indian State of Uttar Pradesh wants to develop the city of Agra, home to the iconic Taj Mahal, into a "solar city" to protect the landmark from further damage. Pollution in the industrial city has, over the past few decades, yellowed and eroded the marble structures. A target of 500 MW of solar energy by 2016-2017 has been established.
New Solar Projects in Israel Will Significantly Increase Installed Capacity: Israel has a long way to go to meet its target of 10% of energy from renewable sources by 2020, or roughly 2.7 GW of installed capacity. But this week it's taking a big step forward, with construction starting on five solar PV projects in the Arava and Negev deserts totaling 35 MW of installed capacity.
Architectural Nobel Prize Winner's Solar Portfolio: Japanese architect Toyo Ito is this year's recipient of the Pritzker Prize, called the Nobel Prize of the architectural world. Among his creations, there's one that stands out for us: the main stadium for the 2009 World Games in Kaohsiung, Taiwan, with its entire 22,000 sq. meter roof covered in solar panels. Motherboard magazine revisits Ito's largest creation.
Bangalore Rail Want Solar on its Property: Bangalore Metro Rail Corp. is inviting private offers to build, own, and operate solar energy projects on its depot properties. The first such offering: flat rooftops at its Byappanahalli Metro Depot comprising office spaces, garages, and maintenance facilities, with an estimated 300 kW potential. Future projects being eyed include the Peenya metro depot and Namma Metro network, the latter having at least 35,000 sq. ft of rooftop available.
ON THE HORIZON
India's Kerala Targets 350 MW by 2017: Kerala State Electricity Board (KSEB) plans to create solar energy capacity of 350 MW during the next four year-period; of that, 50 MW is hoped to be online by the end of this year. Fifteen companies showed interest in Phase I bids, with offers totaling 1.7 GW so far; six companies have been shortlisted with letters-of-intent to be issued soon.
More Wind Power for Tamil Nadu: With so much talk about India's solar policy and progress, don't forget other renewable energy options. The state of Tamil Nadu, which already has more than 7 GW of installed wind capacity, reportedly wants to add another 5 GW of wind power over the next five years. State electricity regulator Tangedco eyes a total of 13.5 GW by 2020.
Speaking of Tangedco, it has been given the green light to administer a "solar purchase obligation" under the state government's solar policy. Essentially it is now deputized to "crack the whip on 'obligated consumers' who do not meet the SPO," and collect penalties from those who default on their SRECs, and buy them at a "forbearance price."
A DEEPER LOOK
Bioenergy Calling the Shots on Asian Fuel Supply: Many emerging markets have tremendous biomass resources and incomplete grids, a potentially favorable match when users are willing to pay for electricity. Yet to become a truly commercial sector, biomass power needs to focus on the vertical logistics of the fuel business. The trick is to follow a standardized model and to cut the financial risks in feedstock procurement. Conventional fuel price rises and demand-side pressures from north Asia (examples such as Indonesia and Thailand) point to the adoption of such a logistics chain.
India's PV Future: Big vs. Small: As India moves away from subsidy-driven PV projects with public PPAs to commercially-driven private PPAs, both multimegawatt-scale grid-connected PV plants and local, captive multikilowatt-scale PV plants have a role to play depending on location and grid quality. Bridge to India examines success factors and drivers for each model.
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