TPT September 2012

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Global Marketplace
102 September 2012
Energy
Japan is poised to overtake Italy
to become the world’s second-
biggest market for solar power
The Japan Times on 4 July took note that Japan is about to
become the No 2 solar market after Germany — the global
leader by installations. Citing a Bloomberg New Energy
Finance forecast, Chisaki Watanabe reported from Tokyo that
new government incentives are driving sales for equipment
makers like Kyocera and Sharp. Industry Minister Yukio
Edano on 18 June set a premium price for solar electricity that
is about triple what industrial users now pay for conventional
power.
Utilities will pay about a half-dollar a kilowatt hour (kWh) for
20 years to solar power producers, almost twice the rate in
Germany. Bloomberg believes that could spur at least $9.5bn
in new installations adding 3.2 gigawatts (gW) of capacity.
A gigawatt is enough to supply about 243,000 homes in
Japan. The country ranked sixth worldwide by new solar
installations last year, when it added 1.3gW to bring its
installed base to five gigawatts. Japanese builders next
year will erect another 3.2gW to 4.7gW, London-based New
Energy Finance forecasts.
That the prospective new power is about equal to the output
of three atomic reactors is significant. Atomic energy provided
some 30 per cent of Japan’s power before the nuclear crisis
that followed the earthquake and tsunami of March 2011. Prime
Minister Yoshihiko Noda’s effort to cut dependence on atomic
energy benefits the domestic solar industry at a time when its
European counterparts have been suffering incentive cuts.
“The tariff is very attractive,” Mina Sekiguchi, associate
partner at the accounting group KPMG in Japan, told the
Times. “The rate reflects the government’s intention to set up
many solar power stations very quickly.”
Under the new programme, utilities will buy solar, biomass,
wind, geothermal and hydro power. All costs will be passed
on to consumers in surcharges, which the government said
will average out at $1.09 a month per household: down from
its previous estimate of $1.25.
› The solar initiative is not without its detractors. It is, Ms
Watanabe observed, raising concern among Japanese
business groups that promoting clean power will raise bills
and slow the economic recovery. One sceptic is Masami
Hasegawa, senior manager of the environmental policy bureau
of Keidanren, Japan’s most powerful business lobby, which
counts Toyota Motor Corp and Nippon Steel Corp among its
members. “This is a mechanism with a high degree of market
intervention by setting tariffs artificially high and making users
shoulder the cost,” Mr Hasegawa said. “We question the
effectiveness of such a scheme.”