Japan’s Journey From Nuclear To Solar Power

Japan could be on course to become the world’s largest market for solar energy, just two years after theFukushima power station melt down took virtually all of its nuclear fleet offline.

Analysts at Deutsche Bank suggest that Japan could take over the top spot for solar power within the next two years, while industry consultant IHS said that in revenue terms, Japan could overtake current leader Germany this year.

It expects to see sales of $20 billion of solar modules in 2013.

image via Shutterstock

image via Shutterstock

Following the Fukushima nuclear disaster, the government in Japan announced last year that it aimed to phase out nuclear power by 2040.

Data released by the Japan Photovoltaic Energy Association recently showed that first quarter installations in Japan rose nearly three-fold to 3,809 megawatt (MW), helped by the introduction last July of above-market incentives in the form of feed in tariffs (FiTs).

Those FiTs, widely used around the world, were wound back in April from 37.8 yen (37.5 cents) per kilowatt hour (kWh) from 42 yen, but according to Bloomberg, is still more than twice those of China (1 yuan or 16c/kWh) and Germany (0.1082 Euro of 14c/kWh).

In the seven months from the introduction of the tariffs and the end of February, Japan’s Ministry of Economy, Trade and Industry approved 12,258 MW of solar projects—both residential and non-residential—at the higher tariff, and Deutsche Bank estimates that Japan will have an annualized “run rate” of up to 9,000 MW.

The Deutsche Bank analysts said the tariffs had already had an impact on costs, with the total system costs for large-scale projects declining by nearly 30 per cent from 280 yen/watt in the last quarter of 2012 to as low as 200 yen/watt now.

ecowatchEditor’s Note: EarthTechling is proud to repost this article courtesy of EcoWatch. Author credit goes to TckTckTck.

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    • ATS

      And hopefully DB can also initiate a healthy debate / platform to develop a debt financing ecosystem for these projects. The continuity and success of these programs should be supported by a market driven funding mechanism.

      The ecosystem from the project finance perspective is still evolving and there is
      the need for some underwriting guideline standardization. The lenders should group and define this standard (just like the TruSolar initiative in the US).

      Akshay Toby Syal, Director at Waterneer Technologies India Pvt. Ltd has been working with some of the developers & lenders to design the underwriting guidelines. His full analysis & opinion on the technicalities of the market and its nuances can be requested via mail (akshay@waterneer.com).