ANOTHER SUNRISE IN THE LAND OF THE RISING SUN

Japan is still trying to figure out what to do about the sun.

Once the world’s solar energy leader due to aggressive government policies, Japan's vaunted corporate giants – manufacturers at one time of over half the world’s photovoltaic cells – miscalculated the significance of tightening world silicon supplies a few years ago and fell behind emerging German and Chinese companies.

In the face of the recent run-up in energy prices, Japan’s leaders set out to recapture dominance in the solar arena.

It already has in place its corporate and manufacturing infrastructure and one of the most equipped and entrenched research and development infrastructures in the world. It even has its Solar City.

But Japan lacks the one ingredient that would make its efforts most rewarding: Sun.

The result is a strange attitude, a little like the xenophobic U.S. immigration argument, a little like the irrational U.S. hostility toward globalization and a little like an anti-intellectual diatribe.

Without a big domestic market potential, Japan seems to fear it will do all the R&D and reap none of the profits.

Yoshihisa Toyosaki, President, IT consultant J-Star Global Inc: "Japan is making the same mistakes it made in chips and LCDs…I doubt if Japan will be represented in the top ten solar power firms in five years."

Nevertheless, Japan's government is reviving its subsidies and checking in at Solar City to see what’s working.

Japan’s Solar City (Pal Town).

From NTDTV via YouTube.

“Solar City” proves allure of sun’s energy in Japan
Mayumi Negishi (w/Miral Fahmy), November 11, 2008 (Reuters)

WHO
The Japanese government (Prime Minister Yasuo Fukuda), the Japanese power industry, the Japanese solar energy industry (Sharp, Kyocera, Sanyo, etc.) and the Japanese people

WHAT
Japan’s Solar City, the Pal Town section of Ota City where ¾ of the houses have solar panels installed at the government’s expense, is indicative of the emphasis the country once put on solar energy development and which it seems once again inclined towards, despite the cloudy climate.

Japan's solar past. (click to enlarge)

WHEN
- Japan has decades of research in solar power.
- The installation of free solar panels in Pal Town began in 2002.
- Japan’s 1st subsidies were altered and finally scrapped in 2006 budget cuts.
- The Japanese solar industry lost market share in 2007 as a result of miscalculations about the silicon shortage.
- At midday in sunny weather, a 4-kilowatt rooftop solar system can run a typical Japanese home but in cloudy weather, which there is a lot of in Japan, it provides less than half the needed power.

WHERE
Ota City's 41 hectare (10 acre) Pal Town is one of Japan's sunnier locations, 80 km (50 miles) northwest of Tokyo.

WHY
- Until a few years ago, the Japanese solar energy industry (Sharp, Kyocera, Sanyo, etc.) manufactured more than half of the world's solar cells. It failed to adjust successfully to the sharp rise in global demand and associated tightening in silicon supplies and was unable to sustain its position as world leader.
- The Japanese giants lost their market share to emerging companies like Q-Cells (Germany) and Suntech (China).
- ¾ of Pal Town's houses have solar systems, most grid-connected, that were installed free-of-charge as part of a 9.7 billion yen Japanese government R&D program that began in 2002 and sought to better manage supply and avoid blackouts.
- The Pal Town program ends in 2010 and most residents there want to keep their systems.
Japan’s climate makes the efficiency of solar systems in other parts of the country, despite their popular appeal, potentially uneconomic.
- For the new incentives program, 9 billion yen ($92 million) is set aside for home solar system installations in 2008-09.
- The Japan Ministry of Economy, Trade and Industry wants 24 billion yen ($246 million) to continue the subsidies program in 2009-10. Its goal is to install 100,000 home systems.

Japan's solar future. (click to enlarge)

QUOTES
- Mika Hiroshima, wife, mother of 2 & 3-year resident, Pal Town: "We moved here because of the panels -- it was something we wanted, but not something we could afford on our own…It just doesn't pay."
- Kazuo Nagashima, assistant section manager, Ota City: "People want solar power…But local governments can do very little on their own."
- Anonymous official, Japanese solar panel making equipment supplier: "No new solar entrant is going to be able to beat Japanese firms' technology -- developed over 30 years -- but unless Japan does more to bolster its domestic solar market, Japan might lose out…The competition is very hungry, very aggressive, and they have momentum."