By Kathie Zipp, Associate Editor
The Department of Energy has a new year’s resolution. With updated energy policies, officials aim to make renewable energy a competitive power source in the U.S. But as the nation is still new at going green, it’s helpful to look at other countries with significant renewable markets to see what we can learn. As a leading manufacturer of solar panels and a veteran in photovoltaics, Japan seems a good choice.
The country is rich in arts and tradition, but not in natural reserves of fossil fuels. Japan’s climate and geography also prevent it from using wind and hydro as feasible renewable resources. But Akiko Chujo of Kyocera Solar explained the world oil crisis of the 70s was what really sparked PV research. “Having been hit hard during the oil crisis, Japan has worked to increase its energy and self-sufficiency ratio,” she said. “Kyocera began research and development in 1975. We believed we could help create a new energy resource from the sun which anyone anywhere on the planet could benefit from.”
Not long after R&D began, the Japanese government initiated its Sunshine Project to promote research into new energy so the country could secure its own resources. Later, the government started a subsidy program for residential solar power systems, which helped stimulate the market.
Federal policy was what really drove expansion of the Japanese PV market, according to a report from the Solar Electric Power Association (SEPA), Policy Changes Trigger Resurgence of Japan’s Solar Market. The residential subsidy program launched in 1994 ran until 2006. As the incentive program wound down, European markets heated up, spurred by feed-in tariffs (FIT) — under which individual ratepayers, homeowners and businesses, are paid for any renewable electricity they produce, and electric grid utilities are obligated to buy any excess energy. Europe (especially Germany and Spain) began to dominate the rapid global growth of PV. So in January 2009, as Chujo explained, Japan restarted a subsidy program which provides 70,000 yen (about $860) per 1 kW for the initial cost of solar power systems, with a cap of about 650,000 yen (about $8,000).
Also in November 2009, the government doubled the conventional purchasing price of surplus solar power in the existing FIT. As SEPA’s report noted, the program guarantees that electric utility companies purchase the surplus electricity produced by PV systems at a fixed price for ten years. In 2009, the fixed price surplus electricity generated by a system of less than 10 kW on a residential house was $0.60/kWh, while the average residential retail rate was $0.30/kWh. New laws promoting the use of non-fossil energy sources and effective use of fossil sources by energy suppliers reinforce the Japanese view of the relationship between renewable energy and efficiency.
Until recently, Japan focused on residential installations. Homes with electric heat powered by rooftop solar units make up 90% of grid connected PV. “During the 1980s, government policy promoted residential use of solar power,” Chujo said. “Moreover, because of limited geographic areas and a dense population, it is not feasible to build utility-scale solar power plants.” However, some are willing to give megawatt-class installations a shot. Chujo said the Federation of Electric Power Companies of Japan has announced a plan to build 30 large-scale solar power plants in the next ten years, for which Kyocera will provide modules. SEPA also reports 140 MW of utility-scale solar is planned for installation by 2020. “With utilities continuously building new solar power plants, we can expect to see an increase in utility scale installations as well as growth in the residential market,” Chujo said.
Furthermore, almost all modules used in Japanese solar installations are manufactured right at home. Chujo said having nearly 90% of the country’s solar systems manufactured domestically will lead to a new and growing sector of the economy that Japan hopes will create thousands of well-paying jobs. Although, SEPA notes, severely limiting imports of less-expensive foreign technology makes the relative cost of solar higher than it might be otherwise.
But that isn’t exactly bad news. SEPA also predicts that the nation’s high retail residential electricity prices and new subsidies will make solar grid-parity reachable in the next decade. “Grid-parity means that the cost to produce alternative energy, such as solar power, equals the price of conventional utility power,” Chujo explained. “As conventional power becomes more expensive, there will be more diffusion of alternative energy use such as solar, and then we would reach that point.” However, she admited those factors are largely out of manufacturers’ hands. “What we can do is continue to increase the efficiency of the cells and modules so we can offer solar products at a reasonable cost, and thus contribute to reaching grid parity.”
Presently subsidies for residential systems are sufficient to steadily expand the Japanese market, noted Chujo. With national solar goals of 28,000 MW by 2020 (twenty times the current capacity) and 53,000 MW by 2030, Japan is aggressively pushing for solar development. SEPA explained that what drives this aggression are goals of regaining world market leadership, increaseing energy independence, and addressing global environmental goals of reducing greenhouse gas emissions. The U.S. shares similar goals, so can we learn something from the Japanese?
“It’s difficult to compare the situations of the U.S. and Japan,” Chujo admited. “The two countries’ basic energy self-sufficiency is so different. However, looking at places like Japan and Europe where the spread of solar power use has been successful, we see the support of the government. In the U.S. there are now various policies, such as tax credits and renewable portfolio standards. At the same time, there is growing concern for the environment, so we can expect demand for solar power will continue to expand.”