U.S. Firm’s $100 Million Investment Shows How Solar Energy Is Soaring In Japan

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Last week, amid the 19th United Nations Framework Convention on Climate Change, Japan announced it was slashing its 2020 greenhouse gas emissions reductions target from 25 percent to just 3.8 percent based on 2005 figures. This news garnered major negative attention for a country better known for being a leader in confronting climate change rather than a spoilsport.

Much of the blame for the revised targets has been attributed to the Fukishima disaster in 2011, which caused Japan to halt its nuclear power program on which the government had expected to rely to achieve greenhouse gas reductions.

The recent news of Japan’s rapidly growing solar power market — the latest being a projected 350 percent solar market growth from 2012 to 2013 — can also be attributed to the meltdown at the Fukushima Daiichi plant and resulting fallout.

The accident at Fukushima forced Japan to shutter its 50 operable nuclear reactors and realign its focus toward a new energy mix, including a redoubled emphasis on renewables. As a result in July 2012, Japan implemented a new feed-in tariff (“FIT”) system that requires utility companies to buy electricity from renewable sources — such as solar, wind, and geothermal — at fixed prices for a given period of time. According to the Washington Post, in most cases, the utility companies are buying the renewable-generated power from private individuals and companies. In April the FIT was revised down 10 percent to its present 42 yen (~$0.43) for every kilowatt-hour of electricity solar owners’ systems send to the grid. This premium is guaranteed for ten years to residential buyers and twenty years to commercial/industrial and utility-scale installations.

Recent projections of solar growth in Japan have far exceeded what analysts expected even just earlier this year.

“The Japanese feed-in tariff is one of the most lucrative in the world,” wrote Adam James, Greentech Media Research Solar Analyst for Global Demand. “As a result, there has been a gold rush. In the first half of 2013, we saw twice as much solar installed in Japan as in all of 2012. From 1.7 gigawatts last year, we expect the Japanese market to grow to well over 6 gigawatts of installed capacity in 2013.”

As if to usher in this new era of solar proliferation with a compelling visual, on November first Japan’s largest solar plant, with a capacity of 70 megawatts, started producing energy from the scenic location amid Kagoshima Bay and Sakurajima volcano. Floating on an offshore grid, the Kagoshima Nanatsujima Mega Solar Power Plant is also being billed as a tourism and educational facility, with a circular observation room exhibiting great views and additional educational material. The project was launched by Kyocera Corporation, which partnered with six other companies to develop the solar plant, which will produce enough power to run 22,000 households.

Kyocera, traditionally an electronics and phone manufacturer, recently inaugurated its first solar project as an independent power producer in the U.S. with a 1.6 megawatt installation in Madison School District in Phoenix, Arizona.

This week Suzuki Motor Corporation, a Japanese automaker, announced it will invest 5.6 billion yen ($56 million) to build a solar power plant in central Japan.

Also this week Arizona-based thin-film solar panel manufacturer First Solar announced plans to invest about $100 million in Japan to develop solar power plants.

“We invest in markets where solar power addresses a fundamental need on a sustainable basis,” said CEO James Hughes. “Japan is adopting a progressive approach by incorporating clean, safe, renewable sources of power in its plans to address the gap created by idle nuclear power. First Solar has proven solutions to support Japan’s vision of energy security and economic growth, and we will continue to invest here as part of our strategy to develop sustainable solar markets.”

According to Bloomberg New Energy Finance, Japan is projected to add more solar energy generation than any other country this year. The government has a target of installing 28 gigawatts of solar by 2020.

In August Japan reached the 10 gigawatt milestone for cumulative photovoltaic capacity, making it only the fifth country to reach this mark after Germany, Italy, China and the U.S.