When it comes to forward thinking on PV, it seems that Japan has been leading the way for much of the last decade. Within Japan, industry insiders – in common with PVPS – see activation and stimulation of a broad demand for PV as a key focus for the industry over the next few years. Several years of fierce industry competition are also predicted.

Despite the relatively poor health of the Japanese economy at the present time and a comparatively austere FY2003 budget for PV development and promotion (down 30 % from FY2002), Japan’s PV industry has good reason to be cheerful. The main programme of support for residential PV system dissemination, which was scheduled to end in April, will now continue until the end of FY2005 and seems likely to be supplemented by additional local government funds. This should be sufficient to sustain the current residential demand, while other aspects of the government’s PV plan continue to assist cost reduction and general raising of awareness of PV’s role in Japan’s future energy supply.

But Japanese industry, like the rest of the world, cannot afford to relax. The residential programme extension and other support initiatives should be viewed purely as ‘breathing space’ for industry to position itself for independence from government subsidies. There is a weight of expectation on PV, and the industry has a short timeframe to show that it can deliver. This will be achieved through two routes; continued cost reduction and broad cultivation of demand for PV in a variety of existing and new markets.

Significant module cost reductions do seem to be close at hand. The cell production capacities of the main manufacturers (mainly but not only in Japan) are now approaching volumes that will bring clear economies of scale. Indeed we are perhaps witnessing the start of a new era of fierce competition; in Europe, for instance, at the current time it is possible to buy Japanese modules – even in relatively small volumes – for less than 2,5 EUR/W (compare this to typically 4 EUR/W two years ago.)

Nevertheless, it is not necessarily only the biggest that will survive, nor will module price reductions alone see PV delivering on its promise. Identification and delivery of marketable products for the new users (construction and other industries, transport sector, consumer applications, energy service companies, for instance) together with price reductions in balance of systems components, installation, operation and maintenance is where innovation and new strategic alliances will bring rewards.

The next three years may well mark a watershed for the PV industry worldwide. Japan is readying itself; the rest of the world would be wise to pay attention.

Contact:

• Osamu Ikki
  Fax: +81 (0)3 3553 8954

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