International companies believe Japan, the world’s third largest economy, will soon become a huge player in the solar energy field, in part due to a new government subsidy program that will start next month.
Japan previously considered a feed-in tariff (FIT) to stimulate alternative energy within the country but after last year’s Fukushima nuclear disaster, public opinion shifted dramatically against atomic power, leaving renewables in the spotlight to make up the difference. Currently renewable energy only accounts for about 1 percent of all power generated in Japan.
The new subsidy program (described as “generous”) requires “utilities to buy electricity generated by renewable sources such as solar, wind and geothermal heat at a premium for 20 years.” The increased costs will be recouped via rate hikes passed on to consumers.
Because of the FIT, Japanese experts believe solar energy within the country will grow from 655.3 billion yen in 2010 to over 1.4797 trillion yen ($18.9 billion) in 2015.
Forecasts like that have lead international companies to rush to get in on the emerging market, even though it will mean competing with some of the largest utilities in Asia, including Tokyo Electric Power, the operator of the now-infamous Fukushima Daiichi nuclear facility. Solar proponents in Japan say that FIT will help lower the cost of solar-generated electricity, making it competitive with traditional energy sources.
“We are almost at grid parity here. Think of what would happen if Japan allows things to run their natural course and solar reaches grid parity. We will be playing with the big boys,” Yu Kaname, VP of Canadian Solar Japan, told Reuters.
Solar sales shot up 30 percent in the post-nuclear disaster climate, a huge increase from 2010′s reported solar output. 1.3 gigawatts of solar were installed in 2011–the first time solar has exceeded 1 gigawatt in Japan. Predictions for 2012 (expanding into March of 2013) are 2.5 gigawatts or more, reportedly because of the enthusiasm for the FIT program.
Although the government is supportive of increased renewable energy production, it’s attempting to fulfill the immediate national energy demand heading into the brutal summer months when the strain on the power grid is the heaviest. The government is attempting to work with local authorities to get some of the country’s 50 nuclear reactors back to work; they have been shut down one by one in the months since Fukushima Daiichi’s failure.
Local municipalities are wary of nuclear power and unlikely to comply with the government’s request to get the reactors back to work. Considering the powerful public opposition to nuclear power, experts believe that it’s unlikely that the reactors will be restarted anytime soon.