New research conducted by NPD Solarbuzz and featured on their blog this past week shows that Japanese solar photovoltaic “PV” installations have now passed 10 GW for cumulative PV capacity, only the fifth country to reach the mark. Of the previous four — Germany, Italy, China, and the US — the latter two only reached the milestone within the past few months, highlighting Japan’s achievement.
Japan Hits 10 GW Milestone
Writing on the Solarbuzz website, NPD Group Vice President Finlay Colville pointed to three landmark high-points along Japan’s solar PV leadership, highlighting not only their recent 10 GW milestone, but also that Japan was the first country to reach the 1 GW of cumulative solar PV back in 2004. This was helped along by;
- The Ministry of Economy, Trade and Industry (METI) launched a subsidy program for residential PV systems as far back as 1994. Initially, the subsidy covered 50% of the cost of PV systems. The budget for FY 1994 was 2 billion Yen.
- Until 2005, Japan had the largest installed PV capacity of any country in the world. This early leadership position was achieved through a well-managed set of programs, coupled with attractive market incentives.
- The early growth of the Japanese PV market was a strong factor in establishing Japanese manufacturing as the first dominant force in the solar PV industry. Manufacturers that benefited from the first phase of government initiatives include several of the companies that are now leaders in the domestic PV industry revival: Sharp, Sanyo and Kyocera.
In the Face of Fukushima
Sadly, another factor that has to be considered in Japan’s recent increase in solar PV installation must be the fallout from the Fukushima Daiichi nuclear ‘disaster’ which followed the massive earthquake and subsequent tsunami on March 11, 2011. Corollary evidence might suggest that the launch of the feed-in tariff program in July 2012 which was focused towards fostering the development and installation of renewable energy throughout the country was a direct response to the subsequent shut down of all of Japan’s nuclear reactors in the wake of the disaster. Regardless of the why, however, this feed-in tariff has been instrumental in accelerating the deployment of large-scale renewable technologies, helping the country’s PV market grow rapidly over the past 12 months.
2013 Sees Regular Growth
There is a litany of Japanese solar stories covered here on CleanTechnica to back up these numbers, not the least of which was a report published in March of this year that predicted the number of Japanese solar installations would overtake the US and Germany this year.
As mentioned earlier, IMS Research — a part of IHS — predicted earlier this year that “[the] Japanese [PV] market is set to grow by 120 percent in 2013 and install more than 5 gigawatts (GW) of new capacity … with installations expected to exceed 1 GW in the first quarter alone.” At the end of May, IHS followed up their earlier report, revealing that not only had Japan reached the 1 GW mark for installations in the first quarter, but that they had installed 1.5 GW, “a stunning 270 percent in the first quarter of 2013”, and were on track to become the “world’s largest solar revenue market in 2013”. While the Japanese Agency for Natural Resources and Energy reported that Japan had added 1,240 MW of solar installations in April and May.
Again borrowing from Colville’s piece on the Solarbuzz website, Japan’s PV industry has benefited greatly from renewed interest in the sector, resulting in;
- Cumulative solar PV installed in Japan broke through the 10 GW barrier during August 2013 and exceeded 10.5 GW at the end of August.
- Until the end of 2012, the Japanese PV market had been heavily weighted towards the rooftop segment, with 97% of PV capacity.
- During the first eight months of 2013, the ground-mount segment has accounted for 27% of new solar PV capacity installed.
- Over the first three quarters of calendar year 2013, Japan is forecast to install more PV capacity than during the entire three-year period spanning 2010 to 2012.
- At the end of August 2013, rooftop solar PV installations remain the dominant type of PV installations by project number and by MW volume, with 89% of market share by capacity. The remaining 11% is spread across the ground-mount and off-grid segments.
Writing more recently, Giles Parkinson from RenewEconomy recently noted that “China, Japan, and the US will compete for domination in the coming years,” while noting that fresh faces are going to be growing up over that same period, with “strong markets in the rest of Asia, Africa and South America … also emerging.”
Looking back over the past few months of the year, we can see just how efficiently the Japanese solar PV industry has been working. Earlier this month it was revealed that Japan was one of only two countries to be home to a competing solar module manufacturer, outside of China (which is dominating the sector). In May it was revealed that by February of this year, Japan had 12.2 GW of new solar installations in the pipeline, including a 400 MW solar power park approved for installation on a remote Japanese island located off the southern coast. Again in May, the Deutsche Bank noted that the Japanese market could reach an annual “run rate” of 7 to 9 GW.
Japanese Solar in the Future
Looking forward, new figures from the Mercom Capital Group reiterate their earlier estimations of a global installation forecast for solar PV of approximately 38 GW by the end of the year, including 8.5 GW installed in China, 7 in Japan, and another 4.5 in the US.
“After years of overcapacity, bankruptcies and record low prices we are now seeing price stabilization, higher capacity utilization rates and a move towards supply-demand equilibrium,” explained Mercom Capital Co-Founder and CEO Raj Prabhu in a blog post. “Market conditions for solar look much better than they did just three months ago and we are reiterating our global installation forecast of ~38 GW for 2013. One of the big overhangs, the China-EU trade case, has been settled, which could have otherwise set off an all-out trade war. This brings some sorely needed certainty to the market.”
A Challenging Future
Both NPD Solarbuzz and Mercom are predicting challenges ahead for Japan, however, with module supply shortages, grid connection issues, and overcapacity concerns. Mercom note that there are reports suggesting “some of the PV project [applications] are getting rejected citing overcpacity and grid stability issues,” adding that the Ministry of Economy, Trade, and Industry have admitted that “some of the facilities approved have not begun construction and they are conducting a survey to find reasons behind the delays including whether there is a shortage of materials.”
All in all, Japan’s solar industry is heading in a good direction, and minus a few bumps along the way, it will be no real surprise to see Japan at the top of solar PV tables for years to come.