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Japan’s booming solar industry begins to decline

Japan’s booming solar industry begins to decline

By BizLED Bureau

July 7, 2016: Following the introduction of generous incentives to promote clean energy across the nation, Japan has been enjoying solar boom for almost four years now. However, recent data revealed that the energy efficiency explosion is beginning to decline.  The decline, after many years of quick growth, is now threatening to weaken the government’s push to find a clean substitute to nuclear power thus, slowing down solar growth in the global photovoltaic industry.

As per the deteriorating volume of PV module shipments, the market is declining.  Some of the core reasons behind the drastic decline include frequent tariff cuts and complexities in securing land and grid connections, an industry analyst said.

Declining domestic market and increasing bankruptcies

The declining domestic market is forcing Japanese panel makers like Kyocera and Sharp to reduce their prices so that they can remain in competition with global companies, In addition, solar power-related bankruptcies are on the rise. In 2015, a total of 36 companies went bankrupt and already in 2016, already 17 companies have become bankrupt within a span of five months.

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Solar has gripped the major share of what’s called as feed-in tariffs, above market charges awarded to manufacturers of clean energy. With existing land for solar in small supply and some utilities saying they can’t acknowledge more alternating solar power, this maybe a concern for some. Furthermore, only about a third of the solar projects awarded the favored rates have in point of fact started to produce power.

Japan’s booming solar industry begins to decline

Potential for 80 GW of solar

A spokesperson from Japan Photovoltaic Energy Association said that as per feed-in tariffs, there’s potential for 80 gigawatts of solar in the nation. However, in order to make the best use of such potential, numerous policies need to be applied incessantly, the spokesperson added.

Japan’s booming solar industry begins to decline

According to industry experts, Japan’s solar market is likely to shift to rooftops. Between 2016 and 2040, Japan will add 94 GW of new solar, which will include 65 gigawatts of rooftop PV.  However, if the nation wants to accomplish a much advanced penetration of renewables, an independent system operator will be essential to make certain that the grid connection approval procedure is neutral.

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With the aim to launch an auction system for large-scale solar in 2017, the government has tightened regulations for solar projects that have been delayed. Now that it is clear that solar power generation systems can definitely supply energy, it is significant to find out how we can make the most of the generated power, a government official said.

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