General Framework
The promotion and deployment of photovoltaic (PV) system has been implemented
through the foresight for new energy in “The Total Primary Energy Supply Outlook”
prepared by the Advisory Committee for Energy. Japan’s target for PV system introduction
by FY2010 was revised to 4 820 MW from 5 000 MW in 2001. The Ministry of Economy,
Trade and Industry has been actively driving forward the promotion measures and
policy for research and development for PV systems to achieve the introduction
target. “The New Energy Law” established in 1997 also stipulates that national
and local governments, energy consumers, energy suppliers and energy equipment
manufacturers should take responsibility to introduce and expand this new energy.
“The Renewable Portfolio Standard Law,” newly established in 2002, also requires
energy suppliers to use a certain percentage of renewable energy.
In addition, the “Law Concerning Promotion Measures to Arrest Global Warming” and “Law for Green Purchase” were enacted.
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National Programme
The Government has implemented R&D, demonstration tests, promotion policies, and law enactment towards the achievement of the targeted introduction capacity of 4 820 MW of PV systems by FY2010. In the field of R&D, technical development for cost reduction of PV systems and technology development for PV promotion and innovative next generation technology has also been realized. Regarding demonstration tests, the following have been continued: a cost reduction demonstration test by standardization of PV systems for industrial use aiming at the introduction and promotion of PV systems for private facilities; a demonstration test for new type of PV systems. As for promotion policy, the Residential PV System Dissemination Programme has been strongly moved forward. In addition, the Government has implemented supporting programmes for the introduction of new energy to local governments and private entrepreneurs.
The budgets for FY2002 of major National PV Programmes are as follows:
- Photovoltaic power generation technology research and development (Including Technology development to deploy PV system): 7 300 MJPY
- Residential PV system Dissemination Programme: 23 200 MJPY
- Field Test Programme for industrial use: 4 500 MJPY
- Demonstrative development of centralized grid-connected PV system: 100 MJPY
- Financial support for entrepreneurs introducing new energy: 23 620 MJPY
- Introduction and promotion of new energy at regional level: 12 700 MJPY
- Support for local efforts to develop the vision of new energy use and energy-saving: 1 230 MJPY
- Support for local activities for new energy: 140 MJPY
- Support for local activities to introduce new energy: 880 MJPY
- Support for regional global warming prevention: 470 MJPY
The budgets for items 5, 6, 7, 8, 9 and 10 include ones for PV and other new energies.
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Research, Development and Demonstration
The New Sunshine Project established in FY1993 to promote a comprehensive, long-term R&D is now finished, and the new technological programme, the “5-Year Plan for Photovoltaic Power Generation Technology Research and Development (FY2001-FY2005)” which was initiated in FY2001, is based on the results obtained thus far. The programme aims at: early establishing PV technology for the realization of approximately the same generation cost as the electricity rate for household; developing common basic technology necessary for full-scale deployment of PV applications; and developing essential technologies PV cells and PV systems based on the new concept. The development objectives of the programme are classified into the fields as stated above. The programmes in progress are as follows.
The short- and medium-term targets are:
- the development of advanced PV cells (thin-film silicon PV cell, thin-film CIS PV cell, InGaP/InGaAs/Ge PV cell and highly efficient polycrystalline PV cell),
- the development of technology focused on PV promotion (large area amorphous silicon wafer, thin-film polycrystalline silicon wafer and polycrystalline silicon wafer), and
- development of common basic technology necessary for full-scale deployment of PV applications (performance evaluation of PV cell and PV systems, recycle and reuse technologies of PV system).
The long-term target is research and development of innovative next generation technology for PV systems (Cat-CVD process, nano-structure silicon PV cell, dye-sensitized PV cell, spherical crystalline silicon PV cell).
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Demonstration
The main demonstration programmes, implemented by the Ministry of Economy, Trade
and Industry (METI) in FY2002 are “PV Field Test for Industrial Use” and the “Demonstrative
Development of centralized Grid-Connected PV System”, newly started in FY2002.
- PV Field Test for Industrial Use
This programme started in FY1998 and this year enters the 5th year of the programme. The aims are:
- to install new types of PV system including building integrated PV systems and standardized PV systems with 10 kW power unit in various applications for the industrial sector;
- to analyze the data collected under a long-term operation and to get a head on introduction and expansion of PV systems in the industrial sector and
- to realize price down by standardization.
Private companies, local public organizations and other organizations are eligible for subsidy. Half of PV installation cost is subsidized. 315 PV systems, a total of 8 410 kW were installed between FY1998 to FY2000. In FY2001, 218 PV systems, totaling 4 890 kW have been installed. In FY2002, 218 PV systems, totaling 5 280 kW were accepted. Under the programme, PV systems were mainly installed to schools, welfare facilities, factories, medical facilities, office buildings, and private facilities. The typical capacity of the installed PV systems was between 10 and 30 kWp.
In addition, PV Field Tests for Public Facilities implemented since FY1992 successfully achieved the expected target and were completed in FY1997. Acquisition and canalization of the operation data continued since FY1998 and were completed in March of 2002.
- Demonstrative Development of Centralized Grid-Connected PV System
This new programme was started in FY2002, in order to conduct demonstrative testing of large-scale introduction of grid-connected PV systems equipped with storage batteries. It aims at establishing grid connection technology for a centralized grid-connected PV system intensively installed to one area. The site for the demonstrative test was selected in FY2002 and PV systems with 3 kW capacity will be introduced to 200 residential houses in one area from FY2003.
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Implementation
- The Ministry of Economy, Trade and Industry
The main implementation programmes that were carried out in FY2002 were the “Residential PV System Dissemination Programme”, the “Introduction and Promotion of New Energy at the Regional Level” and “Financial Support for Entrepreneurs Introducing New Energy”.
- Residential PV System Dissemination Programme
The “Residential PV System Monitor Programme” initiated in FY1994 was renamed “Residential PV System Dissemination Programme” in FY1997, and aims to develop initial residential PV system market. The programme continues to be actively promoted. In 2002, the number of PV systems installed under these programmes exceeded 80 000 systems.
The “Residential PV System Dissemination Programme” aims at reducing the expenses of PV system installers and creating an initial PV market through subsidizing the installation cost for residential PV systems. The subsidy is given in three categories, (i) to an individual who is going to install PV system to his own house, (ii) to ready-built house suppliers of housing development complexes and (iii) to local public organizations who are going to introduce PV system to public buildings. PV systems with reverse flow connected to low voltage lines are subsidized. In FY2001, subsidy was provided at 120 000 JPY/kW, but in FY2002, the subsidy was decreased to 100 000 JPY/kW.
The residential PV systems have been installed to 52 352 houses, totaling 189 MW from FY1994 to FY2000. In FY2001, 29 389 houses, total 114,7 MW were accepted, and as of December 27, 2002,
29 880 houses were accepted.
- The Introduction and Promotion of New Energy at the Regional Level
This project aims at accelerating new energy introduction by supporting the regional projects that local governments develop the new energy introduction. Subsidy is provided to local public organizations who are going to introduce and promote PV, wind power, solar heat, differential temperature energy, natural gas co-generation, fuel cells, wastes generation, use of waste heat, production of wasted fuel, clean energy cars and energy saving measurements. A PV system is subsidized for a 150 kW output and over. Half of the system installation cost is subsidized. 81 systems, in total, were subsidized from FY1998 to FY2000. 37 systems of these were PV systems. The total capacity installed was 3 965 kW. In FY2001, 37 systems in total were qualified and 15 systems out of them were PV systems. Total capacity installed was 3 074 kW. In FY2002, 57 systems in total were qualified and 21 systems out of them were PV systems. Total capacity installed was 2 391 kW. The programme allows local governments to understand the benefit of the introduc-tion of renewable energy and to introduce PV systems selectively to school buildings and public facilities over several fiscal years.
- Financial Support for Entrepreneurs Introducing New Energy
This programme aims at accelerating the new energy introduction by supporting the industrial entrepreneurs who set about introducing new energy, such as PV, wind power, solar heat, differential temperature energy, natural gas co-generation, fuel cells, wastes generation, use of waste heat, produc-tion of wastes fuel. The private entrepreneurs who set up new energy businesses are eligible for guaranteed debt or subsidy. A third of the system installation cost is subsidized and guaranteed debt is 90 % of a debt. The capacity of an eligible PV system is 100 kW and over. 76 systems in total were qualified from FY1998 to FY2000 and 2 systems out of them were PV systems with 216 kW in total. In FY2001, 34 systems in total were qualified and one system was a PV system with 140 kW. In FY2002, 25 systems in total were qualified and one system was a PV system with 25 kW.
Additionally, support has been given to the projects in order that local governments develop their vision for the introduction of new energy at the local level and to NGOs’ supporting activities to intro-duce new energy at the local level.
- The Ministry of Land, Infrastructure and Transport
Under the “Guideline for Planning Environmentally-Friendly Government Facilities (Green Government Office Building)”, construction of green government office buildings with PV system have been promoted. The ministry started introducing PV systems to government office buildings from FY2001. Introduction of PV systems 410 kW, in total, will be completed on 13 government office buildings by the end of FY2002.
- The Ministry of Posts and Telecommunications
The Ministry continues its “Environmentally-Friendly Facilities Provision Project” for the purpose of environmental protection in the community and are promoting the introduction of PV systems to post offices.
- The Ministry of Education, Culture, Sports, Science and Technology
The Ministry continues its “Eco-school Promotion Pilot Model Project” initiated in partnership with METI in FY1997 and is promoting the introduction of PV systems to elementary and junior high schools in Japan. 157 schools over Japan were designated as pilot model schools by FY2001, and 114 schools installed PV systems with 10 kW and over. In FY2002, 87 schools were designated as pilot model schools and PV systems are to be installed to 47 schools among them. In addition, the Ministry initiated the introduction of PV systems to national universities and other national schools and installed 275 PV systems with 10 to 50 kW to 133 schools throughout Japan by the end of FY2001. Total capacity installed was 8 000 kW.
- The Ministry of Environment
The Ministry is promoting project of CO2 emission reduction measures by use of natural energy under the “Basic Guideline for Promotion Measures to Arrest Global Warming” settled in FY1986.
In addition, “Law for Green Purchase” came into force in April 2001. Commodities procured by Government have to be replaced by environmental-friendly products. Since PV systems are specified as special procurement products, the introduction of PV systems to governmental facilities is under discussion. There are indications that these actions are expanding to local governments.
- The Local Governments and Municipals
Movements to grapple positively with environmental issues are spreading among the local governments and municipals. Some prefectures began to set their own target for the introduction of the amount of new energy following the national target for PV system introduction (4 820 MW). More and more local municipals began to develop the new energy introduction vision and to plan the introduction of PV systems. Some local governments and municipals also provide their own additional subsidy to public financing and their number is increasing year by year. Promotional supports to PV systems are enhanced at the local government and municipal levels. As of September 2002, local governments who provided the subsidy for residential PV system totaled 229.
- Utilities
Electric power companies continue the introduction of PV systems to their own facilities, and the net metering system with buy-back contracts for surplus PV electricity at the same rate as selling. As of the end of March in 2002, the capacity installed to their facilities was 4 548 kW and the power bought by buy-back contract totaled 124 139 MWh.
Electric power companies in Japan established a “Green Power Fund” in October 2000 aiming at introducing and promoting PV systems and wind power systems. Electric power companies bill additional charge as a contribution of 500 JPY/share/month to their supporters among their customers, and contribute the same endowment as the amount of their supporters’ contribution. The fund is used for the installation of PV systems and wind power systems. In 2001, 39 public facilities throughout Japan, including schools were subsidized through the Fund. The total capacity installed was 829 kW.
In 2002, 85 public facilities were designated and the installation of PV systems 1 370,6 kW in total, are underway.
- Financing Institutes
Some financing institutions, including banks, provide preferential financing at a low interest rate with the introduction of residential PV systems for private use.
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Industry Status
For several years, the PV industry has been rapidly growing through policies for
research and development, measures for promotions and the development of the environment
for dissemination by METI and other ministries and agencies. Especially the market
for residential PV system has been remarkably growing and playing a role of pulling
the PV market in Japan. The annual production of PV cells in Japan increased from
50 MW level in 1998 to a 100 MW level in 2000, and it exceeded 200 MW in 2002.
Thus, the range of industries supporting photovoltaic power generation is expanding
beyond PV cells and PV systems manufacturers to other industries such as suppliers
of feedstock for PV cells, manufacturers of production equipment, manufacturers
of PV components and power systems, housing constructors and other manufacturers
producing products equipped with PV cells.
In response to these trends, the Japan Photovoltaic Energy Association (JPEA) has announced the promotional scenario, “Self-sustainable PV Industry Vision: the Genesis of PV Industry for Energy and Environment”. It indicates future perspectives and a roadmap of PV promotional means for the next 30 years up to 2030, and has declared that the PV industry would establish a self-sustainable market and evolve to be one of the cornerstones of Japan’s industry. The Vision visualizes that PV market scale will reach 473 billion Yen by 2010, 1 250 billion Yen by 2020 and 2 250 billion Yen by 2030.
Main PV cell manufacturers are Sharp, Kyocera, Mitsubishi Electric, Sanyo Electric, Canon, Kaneka, Matsushita Ecology Systems (former Matsushita Seiko), Mitsubishi Heavy Industry, Showa Shell Sekiyu and MSK. Furthermore, Kobe Steel and Kawasaki Heavy Industries entered into the PV market in cooperation with overseas manufacturers. To correspond to recent increase of worldwide demand for PV cells and PV modules, manufacturers in Japan have been positively expanding their production capacity. Sharp expanded their annual production capacity from 94 MW to 200 MW in 2002 and announced that it would produce PV modules in a plant with 10 MW of annual production capacity in the USA. Kyocera is planning to manufacture PV modules in China. Sanyo Electric is planning to expand its annual production capacity to 100 MW by 2005 and announced a plan to manufacture PV modules, 10 MW/Year in Mexico. Mitsubishi Electric also expanded their annual production capacity from 25 MW to 45 MW and is planning to construct a new plant. Mitsubishi Heavy Industry constructed a plant of amorphous silicon PV cell with 10 MW of annual production capacity and started its operation in 2002, following Kaneka.
As for wafer manufacturers for PV cells, SUMCO Solar expanded their production capacity of poly-crystalline silicon wafer by electromagnetic casting process, as well as M Setek, which expanded production of monocrystalline silicon wafers.
Kawasaki Steel started to produce polycrystalline Si ingot for PV cells with a 40 MW of annual production capacity. Tokuyama is constructing a pilot plant for solar grade silicon.
Furthermore, major housing manufacturers released new models with adapted building-integrated PV systems one after another since they commercialized “the houses equipped with PV system as a standard specification” in 1999. Especially, Sekisui Chemical focuses on the sales of the houses equipped with PV systems as a standard specification. They successfully received orders for 17 500 houses in 2002. In addition to the above-mentioned manufacturers, building material manufacturers produce roofing materials, outer wall materials and sheet glass and commercialize building materials integrated with PV cells. Moreover, some builders start to construct buildings with integrated PV cell as “environmental co-existence” buildings. As previously mentioned, industries from different fields are commercializing products with PV cell, and therefore the range of PV industry is expanding.
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Market Development
The possibility and application area of PV cells and PV systems have been expanding through financial support corresponding to the market scale of PV systems and policies for research and development of PV systems initiated by METI. The initial market development for PV systems has increasingly made progress, in the market sector of private houses, public facilities, industrial facilities, traffic facilities, railroad facilities and commercial buildings. Especially in the housing sector, marketing to new and existing houses is satisfactorily progressing. The market scale of 3-5 kW residential PV systems is expanding to annual sales of 30 000 to 40 000 systems. Leading housing manufacturers are creating new markets for PV systems by developing all-electrified houses equipped with PV systems, and developing housing areas with 50 to 100 houses equipped with PV systems and housing complexes electrified with PV system. Also in the sectors of public facilities, Industrial facilities, commercial facilities and commercial buildings, standardization of PV systems of 10-500 kW scale and the development of novel type PV systems is promoted. The market size for these sectors is estimated to be 500 to 1 000 systems annually. To correspond to the demand of the above-mentioned sectors, PV cell manufacturers and building material makers commercialize highly efficient modules, thin type modules, lightweight modules, triangle modules, trapezoid modules, lighting type modules, colored modules, flexible modules, roofing integrated modules, wall material integrated modules, and bi-facial generation modules which meet user’s needs to improve design and function.
Furthermore, there is a widespread trend that local governments enhance the installation of PV systems to schools, governmental offices, welfare facilities, hospitals, and community centers. Private enterprises are also promoting the application of PV systems to rooftops and roofs of their head office buildings, business offices, factories and warehouses. Some private enterprises are planning to introduce PV systematically to restraints, railway stations, service stations, etc.
Additionally, off-grid non-domestic PV systems without governmental support are actively utilized as commercial power supply sources for telecommunications, traffic signs, telemetering, ventilating fans, and lighting.
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Table 1: The cumulative installed PV power in 4 sub-markets in kWp
| Sub-market/ application |
1992 |
1993 |
1994 |
1995 |
1996 |
1997 |
1998 |
1999 |
2000 |
| Off-grid domestic |
150 |
200 |
250 |
300 |
350 |
400 |
450 |
500 |
550 |
| Off-grid non-domestic |
15 260 |
19 170 |
23 260 |
29 360 |
35 890 |
44 900 |
52 300 |
56 200 |
61 350 |
| Grid-connected distributed |
1 220 |
2 300 |
5 130 |
10 820 |
20 500 |
43 100 |
77 750 |
149 000 |
252 7000 |
| Grid-connected centralized |
2 370 |
2 600 |
2 600 |
2 900 |
2 900 |
2 900 |
2 900 |
2 900 |
2 900 |
| Total |
19 000 |
24 270 |
31 240 |
43 380 |
59 640 |
91 300 |
133 400 |
208 600 |
317 500 |
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Future Outlook
With backing for the promotion and deployment of PV systems, publicity activities, promotion measures to arrest global warning, green purchase activities implemented by the Government’s policy, individuals, government offices, local governments and private entrepreneurs have promoted a better understanding of introduction of PV systems. With the growth of the PV market, PV cell manufacturers make an effort to expand their production capacity and to reduce PV system cost. The roofing industry, building material industry, housing industry, construction industry and power source equipment industry are stimulated to enter into the PV market.
These sectors are expected to play an essential role in promoting PV systems as a go-between to the PV industry and end users. Therefore, the PV market, especially for residents, public facilities, commercial buildings and industrial facilities, will be deploying more and more, and is expected to grow to a self-sustaining market in the near future.
Finally, METI decided to continue the Residential PV System Dissemination Programme and plans to establish a new budget for the PV Field Test for New Technologies for the FY2003 budget bill, in place of the PV Field Test for Industrial Use. Thus industries, the government and academics will continue to support the promotion of PV systems. Moreover, the Renewable Portfolio Standard Law will be enforced from April 2003. It is expected to further accelerate the introduction of new energies.
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Further reading about Japan
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