By D.A. Barber
Japan, the world’s third-largest economy, has historically been ahead of many countries in adopting residential solar. In 2009, residential was 90 percent of the total PV market in Japan, which at the time was the highest market share for residential installations anywhere globally. In fact, there has long been a focus on domestic PV installations rather than utility-scale solar plants in Japan. That’s because before the Tohoku Earthquake, as the March 11, 2011 disaster is referred to in Japan, resource-scarce Japan had relied heavily on nuclear power and was the world's third largest user of that technology. A March 2011 report by the Pew Environment Group, Who's Winning the Clean Energy Race? noted that China spent a record $54.4 billion on clean energy investments in 2010 while Japan ranked fifth in terms of its installed renewable energy capacity. During the previous five years, according to the Pew report, renewable energy had grown by 45 percent in Japan, compared with 108 percent in China.
But when the 9.0 magnitude earthquake and tsunami on March 11, 2011, touched off meltdowns of three reactors at the Fukushima Daiichi nuclear plant it led to national power shortages and rolling blackouts, compelling the country to make quicker policy and technology changes for the rapid expansion of solar energy. By the end of 2011, the Japanese government had announced a number of major solar projects and has now targeted 28GW of PV power by 2020.
In fact, the March 2011 disaster so mobilized the solar energy industry that it points to a bright future for both Japan's PV and BIPV market as Japan rebuilds. And there is a growing trend of more PV players moving into the Japanese market ahead of the recently passed feed-in-tariff (FIT), which will go into effect on July 1, 2012.
Electric Capacity Down
Tokyo Electric Power Co.’s (Tepco) Fukushima Daiichi nuclear power plant shut-down led to electric power cuts in northeast Japan as the government started using brownouts in areas with less damage to conserve power. Tepco’s April 2011 electricity output was down 15 percent from a year earlier and since western Japan runs on a different power frequency, the utility couldn’t import power from other cities. The earthquake also knocked out power plants operated by Tohoku Electric Power. This resulted in the Japanese government forcing a mandatory 15 percent reduction in consumption by heavy industrial electricity users like Sony, Toyota Motor Corp., Panasonic, and Komatsu to avoid blackouts due to expected power shortages during the summer. It was the first time the government had imposed power restrictions since the 1974 oil crisis.
But as EnergyTrend reported on March 14, 2011, most PV manufacturers, such as Sharp, Sanyo, and Kyocera, are located in the Kanzai area of Japan where the impact of quake was minimal. This means there w feed-in-tariff still be access to PV panels to ease the energy crunch.
Rebuilding the Infrastructure
Japan now faces the greatest reconstruction since World War II, which is estimated to cost $210 billion, according to a June 2011Japanese Cabinet Office report. Officials say it could take ten years to completely rebuild the affected areas. Most of the investment will be directed to reconstruct buildings such as homes, stores and manufacturing facilities, with the rest going towards the rebuilding of infrastructure such as roads and harbors. But an advisory panel to the Japanese government proposed that the country should also be encouraging greater use of solar energy during reconstruction.
New legislation is predicted to see installed PV capacity grow.
A survey conducted from late May to early June 2011 of all 47 prefectures found that 36 already had their own solar programs before the March 11 earthquake, including subsidies for installation of PV panels. In Kanagawa Prefecture a system under which residents would be able to install PV panels at no cost is being considered by a study group launched in May 2011 in line with the area’s new Gov. Yuji Kuroiwa's election pledge to install PV panels on 2 million homes. The Chiba prefectural government has also decided to subsidize installation of PV panels, while Gunma and Yamanashi prefectures have increased their solar power budgets.
Kyocera and Nichicon Corp. announced in January 2012 plans to roll-out a residential backup power supply system that pairs PV panels with batteries for use in Japan this summer. The system will include Kyocera’s PV equipment and lithium-ion battery storage and inverters from Nichicon Corp. Kyocera says it has also developed hardware and software to control the charge and discharge of solar electricity in order to manage feeding electricity into either the home or the grid.
Sharp has also begun offering an integrated solution to Japanese homeowners that tie PV modules into tablet computers allowing users to track their PV power generation and the power consumption of key home appliances.
Major Solar Projects Spike
In response to the March 2011 crisis, Kyocera increased the size of its PV manufacturing facility in Fukushima, making it now the largest PV plant in Japan. In order to meet the government’s 15 percent electricity reduction target, Kyocera has also installed a 130kW PV system at its new headquarters, and a 58kW PV generating system at its Yokohama sales office. Kyocera has also supplied 13MW of PVs to a power plant in eastern Japan which was scheduled to begin operation in December 2011.
In October 2011, Toshiba Corporation joined a seven-company consortium that includes Mitsui Chemical and Mitsui & Co. to construct and operate Japan's largest solar and wind power plant.
Tahara Solar Photovoltaic and Wind Power Project
The "Tahara Solar Photovoltaic and Wind Power Generation Joint Project" will be a 50MW PV and 6MW wind power plant on a coastal site in Aichi prefecture, with construction scheduled to start in June 2012. Toshiba also recently announced it was buying Swiss smart meter manufacturer Landis+Gyr for $2.4 billion.
Also in November 2011, AUO Optronics’ affiliate company M.Setek resumed full operations at its PV factory in Soma. The factory, which produces polysilicon and single crystal silicon wafers and ingots for Sanyo, SunPower and Isofoton, had been running at half capacity since July 2011.
Kansai Electric Power’s 10MW PV power plant, located in Sakai city, Osaka, also began operations in September 2011 and is now one of the largest installations of its kind in Japan. The PV facility, which uses 74,000 Sharp thin film PV panels, is capable of generating enough energy to supply 3,000 average households.
Thin-film producer Solar Frontier, the Japanese subsidiary of Dutch oil giant Shell, officially opened its Kunitomi factory located outside the city of Miyazaki in April 2011. The $1.28 billion facility, which reached its full capacity of nearly 1GW in July, is touted as the world’s largest CIS (copper indium selenide) thin film solar module production plant. Solar Frontier is now involved with the 10MW PV Komekurayama Solar Power Plant project in Yamanashi Prefecture and has been working to install 1MW of PV cells across the Kanto and Tohoko regions, which were badly damaged by the earthquake.
Meanwhile, PV panel manufacturer Yocasol Inc. is focusing on niche markets such as Japan’s Building Integrated Photovoltaics (BIPV) market, which is currently between 1 and 2MW. With the new FIT supporting PV installations after July 1, 2012, Yocasol expects BIPV projects in Japan will expand rapidly.
National Energy Policy in Post-Fukushima Japan
Prior to March 11, nuclear power supplied about 25 percent of Japan's energy and the government had plans to construct nine new nuclear plants by 2020 and 14 by 2030. Japan has since changed its energy strategy, making renewable energy a major part of the country’s energy mix. Now the government’s target for domestic PV installations is 28GW by 2020 and 58GW by 2030, which would then account for about 10 percent of the country’s electricity. Currently, PVs supply about 4GW.
In May 2011, the CEO and president of Japanese telecom company Softbank and Japan’s richest man, Masayoshi Son, announced plans to build 10 large PV plants in partnership with local authorities to help revitalize the tsunami affected region. Son, who also established the Japan Renewable Energy Foundation, has argued that Japan can have 60 percent renewable energy by 2030 and has offered to personally contribute $100 million to help pay for the project. However, a November 2011 meeting of the Renewable Energy Council created by Son and 35 prefecture leaders attracted only four governors putting the project in doubt.
But the push for more solar in Japan is pressing ahead.
The Democratic Party Prime Minister at the time, Naoto Kan, announced at the May 2011 Group of Eight summit in France that Japan would aim to install PV panels on 10 million homes and suggested the government may start requiring all new buildings install rooftop PV panels by 2030. But Kan was on his way out of power and in late August 2011 his final act in power before he informed his cabinet that he would be stepping down was to see new renewable energy legislation signed into law.
New Laws to Boost Solar Industry
Japan's parliament approved a landmark energy bill on August 26, 2011, that includes a feed-in-tariff law - which goes into effect in July 2012. For solar in Japan, the FIT law is expected to provide a major boost to the goal to have 28GW of solar installed by 2020. At the end of 2011, Japan had about 4.8GW and the country was installing solar at roughly 1GW per year. (When implemented in Germany and Spain, FITs did boost solar installations of solar panels.) Japan’s domestic shipments of PV panels could increase by as much as 10 times in “a fairly short period” with the new law, according to the Japan Photovoltaic Energy Association.
Japan’s Solar Future
The debate about future energy supplies in Japan has been fierce since the March 11, 2011 disaster. Former Prime Minister Naoto Kan’s leadership did not survive the struggle, though the passage of the energy legislation was one of his last acts in office. The bill, which will become effective on July 1, 2012, could increase solar installations in the country more than five-fold by 2020. Japanese companies such as Kyocera and Sharp are expected to benefit, as well as outside companies that do business in Japan, such as Suntech and Canadian Solar.
There is still uncertainty regarding Japan's large-scale adoption of solar power, but it is clear that much of the world will be watching what that country does in its unique rebuilding circumstances. Complicating the energy reform situation is the fact that Japan has a new government in a nation where change tends to take time and is often mired in bureaucracy, political in-fighting, and set cultural attitudes. One challenge Japan faces is connecting a large number of renewable power plants to the grid and upgrading the grid is expected to take time. Nevertheless, the Japanese solar market will look much different a year from now and the innovations and lessons learned getting there should benefit the entire global solar industry.