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Last updated: 9 January 2005

This 40 kW facade is part of a 480 kW system installed at Saishunkan Hilltop Yakusai Factory Park under the Advanced PV Field Test. [PHOTO RTS CORP] A clear industry development vision and more than a decade of concerted and integrated public support for photovoltaic research, development, demonstration and dissemination has given Japan’s PV industry a very strong foothold at both the national and global levels. A new national PV vision with competitive business at its core was recently unveiled.

Japanese companies manufactured over 400 MW or 60 % of global PV module production in 2003, 55 % of which was destined for the local market. A major driver of this national industry and capacity development has been the residential PV system dissemination programme which accounts for some 70 % of total capacity installed in Japan to date and which constituted almost 90 % of the total demand in FY2003.

The Ministry of Economy, Trade and Industry (METI), which oversees PV programme budget administration within its ‘Promotion of New Energy’ remit, has indicated that the residential subsidy programme will close at the end of FY2005. The new development vision will help Japan’s industry maintain and strengthen it’s competitive edge.

Supply & demand context

METI’s ‘Vision for New Energy Business’ released at the end of June offers strategic options for contributing to Japan’s energy needs to 2030, supporting the Ministry’s Long-term Energy Supply and Demand Outlook. The Energy Outlook itself, while assessing the supply and demand balance in the context of local and global industrial, economic and social change, also considers environmental constraints, requirements for robust and flexible energy supply, and supply diversity and decentralization in order to derive a series of energy sector development scenarios. Alongside the reference case, high and low nuclear power use scenarios and another driven by advanced energy conservation, new energy technologies including PV feature under the ‘new energy advanced case’. This foresees a 10 % new and renewables contribution to primary energy supply by 2030, compared to approximately 3 % under the reference case. PV is earmarked to meet 51,3 % – equivalent to 80 GW of installed capacity or 20,24 billion litres of crude oil – of this 2030 figure for new and renewable energy.

Strategic objectives

Achieving this new energy future will require strategic technological development, measures to accelerate demand and initiatives to build a competitive, sustainable PV industry. Demand acceleration might include, for instance, the development of new business models such as PV service utilities or preferential loans for PV-equipped houses and other measures to address PV payback period through appropriate electricity buy-back rates. Industry competitiveness and sustainability would demand an expanded skilled work force, supported by appropriate training standards, increased public awareness, for instance through Ecoschools projects, and significantly increased targeting of overseas markets.

Coinciding with this and underpinning the strategic technological thrust, NEDO, the New Energy and Industrial Technology Development Organisation, issued its PV 2030 Roadmap focusing on ‘mass introduction of PV systems without restriction’.

The Roadmap establishes a target for PV power generation costs to be equivalent to industrial electricity prices in 2030. To achieve this, NEDO has identified a series of technological targets for the next 25 years. These include a module production cost reduction – supported by targeted efficiency improvements – from 100 JPY/W (around 1 USD/W) in 2010 to under 50 JPY/W by 2030, a 30 year lifetime and dramatic savings in feedstock consumption to 1 g/W by 2030 (compared to the current 10-13 g/W).

As for the industry itself, it is gamely rising to the new business challenge with the four largest producers each aiming to increase production by 25 to 170 % over the next two years and stepping up overseas production or exports. New products are being developed for the housing market, specifically with simpler and quicker installation in mind, and the world’s leading PV player is also addressing public awareness by supporting solar lecturers and establishing 10 solar exhibitions throughout the country.

About the only grey cloud is a recent announcement by a leading polysilicon manufacturer that it will increase the price of its product – the raw material for silicon wafers – by 20 %, although the extra revenue will be reinvested to support business growth.

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