JAPAN ON THE NEW ENERGY COMEBACK TRAIL

Japan led the world’s solar energy industry from the middle 1990s until the middle of this decade.

The commonly accepted explanation of Japan’s fall is that Germany’s incentives turned the market toward Europe.

Kimio Yamaka, chief researcher & director general/economic and industrial research department at the Development Bank of Japan explains it slightly differently, attributing the fall to bureaucratic Japanese corporations’ (Ex: Sharp) inability to respond to sudden silicon shortages as readily as German and Chinese solar startups (Ex: Q-Cells, SunTech).

It appears Japan is ready to aggressively get back in the game. The Japanese government wants its industry to cut the cost of installing a home system in half in the next 3-to-5 years and increase production capacity 40 times over by 2030.

It seems, based on Yamaka’s remarks, that Japan will base its re-emerging solar industry on thin film solar technology.

Name-dropping: Sharp and municipal utility Kansai Electric Power Co. will have their Cool City Sakai, with its 28-megawatt solar materials production capacity, in operation by March 2010.

Sharp's magnificent Solar Ark is a monument to Japan's former world solar industry leadership - and its capacity to return to the top. (click to enlarge)

Japan Solar Energy Society

Why is Japan lagging in solar energy field?
Tomoko Otake, August 31, 2008 (The Japan Times)

WHO
Kimio Yamaka, chief researcher & director general/economic and industrial research department, Development Bank of Japan; Tomoko Otake, journalist, Japan Times; Sharp; Q-Cells; Suntech; First Solar; Kaneka Corp.

WHAT
A Japanese expert reviews the factors in Japan’s recent fall in the solar energy sector and discusses its coming rise.

click to enlarge

WHEN
- 2004: Germany’s feed-in tariff began driving solar cell production volume on an international scale, creating a silicon shortage.
- 2005: Japan fell out of world leadership in solar energy capacity.
- 2007: Q-Cells overtook Sharp in solar cell production.
- 3-to-5 years: Japan aims to cut the cost of a home system in half.
- 2030: Japan’s solar industry production capacity aims to increase 40 times.

WHERE
- Sharp is Japan’s leading solar cell producer. (See Solar Ark)
- Q-Cells is Germany’s leading solar cell producer.
- Suntech is China’s leading solar cell producer.
- The United States and China are closely trailing Japan and Germany in solar cell production.
- Sharp will build "mega solar" power plants in the city of Sakai, Osaka Prefecture.

WHY
- Market leadership shifted away from Japan in the 2004-2005 period when silicon shortages emerged. Q-Cells and Suntech, startups able to move quickly, procured independent supplies. At the same time, Japanese players, large electronics makers (ex: Sharp), did not move fast enough.
- The silicon shortage occurred because silicon manufacturers, fearing another bursting bubble like the IT events of 1999-2001, did not want to boost dramatically increase capacity.
- The price of silicon has increased 10 times to $400-$500 per kilogram.
- Silicon manufacturers now require 7-to-10 year contracts.
- Problems with silicon supply and cost led to thin film development. (Ex: First Solar’s cadmium telluride thin film.)
- First Solar is the world’s leading thin film developer.
- Kaneka Corp. has produced a thin film that, at 12%, is about 20% more efficient than the industry average efficiency of 9-to-10%. Kaneka Corp.is aiming to get to 14% efficiency while Sharp is going with standard efficiency and developing volume production capacity.
- The Japanese government’s declared goal is to cut the price of installing a solar system to ¥2.3 million per household.
Japan’s wind is behind the rest of the world due to limited potential.
- Solar hot water heating is underutilized due to a history in the 1980s of “unethical business practices by some makers” but the city of Tokyo is planning a development program.

Japan's powerful utilities will help the nation develop the next generation of solar energy. (click to enlarge)

QUOTES
- Kimio Yamaka, chief researcher & director general/economic and industrial research department, Development Bank of Japan; “In 2004, Germany started "feed-in tariffs"…which led to a severe shortage of the silicon used for solar cells. Q-Cells of Germany and Suntech of China…are startups, so they can make speedy decisions, while most Japanese players are large electronics makers, and their top managers could not move fast enough…”
- Yamaka, on the silicon shortage: “…major silicon makers are reluctant to boost production because they are worried about excessive debt, which they suffered after the late-1990s IT bubble burst…”
- Otake, Japan Times: “In thin-film technologies, a thin layer of silicon or other photovoltaic material is coated on plates of glass or stainless steel.”
- Yamaka, on Japan’s thin film industry: “Japan still has an edge, with a long history in thin-film technology. The chemicals company Kaneka Corp. has developed a thin-film silicon technology that can convert 12 percent of solar energy to electricity, which is quite a feat, considering that other thin-film technologies have energy conversion efficiencies of less than 10 percent.”