Japan on track to become world’s largest solar market

Japan has been forecast to install US$20 billion worth of PV systems in 2013, up 82% from US$11 billion in 2012

The Japanese residential market is expected to sustain its momentum. (Pic: CoCreatr)


By Nilima Choudhury

Japan approved 21,090MW of clean energy projects in 2012 according to the government, keeping it on track to install more than 5GW of solar this year.

The country’s solar installations rose by 270% in the first quarter of 2013, meaning it could become the world’s largest solar photovoltaic (PV) market in terms of revenue.

Japan is forecast to install US$20 billion worth of PV systems in 2013, up 82% from US$11 billion in 2012. In contrast, the global market is set for only a 4% growth.

“Japan’s government has introduced a highly attractive feed-in tariff (FiT) to help stimulate solar growth,” said Sam Wilkinson, solar research manager at market analysts IHS.

“In contrast, the European market that historically has led global solar demand is slowing as regional market conditions become less attractive. The deceleration in Europe and the implementation of the FiT in Japan are combining to propel the country to the top of the global solar market this year.”

The earthquake and tsunami in 2011 that led to the shutdown of nuclear facilities and a shortage of electricity has seen Japan aggressively promote solar energy with the most globally attractive incentive scheme for the adoption of solar.


However, IHS senior analyst Frank Xie told RTCC that some government officials are concerned that the overly generous FiT could create a ‘boom and bust’ scenario. European markets that developed too fast as a result of FiT forced governments to make retroactive cuts to incentive schemes.

“They [the government] are still arguing that to a certain level the government should support the PV development but not in hasty steps,” said Xie.

Xie told RTCC that the success of the renewable energy market is dependent on the government making significant changes including improvements to the electricity grid.

Analysts have predicted that along with China, Japan will drive PV demand to a record high of 35.1GW by the end of this year, up 22% year-on-year.

Other observers urge caution with these latest figures.

Hisayo Takada, climate change and energy campaigner at Greenpeace says the new government has set its heart on developing its fossil fuel energy systems and revive its nuclear programme.

“The government is now making it easier to build coal power plants. Also the government is putting [in] a lot of effort to obtain more gas,” he said.


The PV market in Japan is not without its challenges. While huge growth opportunities exist in the country, capitalising on them is not a straightforward task for international suppliers with strict certification processes that need to be followed.

Xie said the Japanese solar PV market is dominated by a preference for domestic brands. However the utility scale sector is more open to foreigners, compared to the rooftop market, because local suppliers are unable to keep up with demand for such large projects.

The analyst attributes this to one particular component in the delivery of solar installations.

Inverters, which convert the electricity generated by solar panels from direct current to alternating current allowing households to use the energy, are in short supply in Japan forcing more developers to import them.

Due to this, Xie has predicted a slow-down of the utility scale market from the second half of next year, but remains positive of the residential sector.

“In our view the Japanese market will continue its boom,” said Xie. “The rooftop and small commercial section will continue to grow.”

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