Japanese PV Market: En Fuego 0

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What is going on with Japanese solar?

The media has been schizophrenic on this question.

GTM just posted a story about how the country was blowing away earlier installation forecasts. But Reuters followed up last week with a story on how inexperienced Japanese developers are failing to deliver on projects.

The confusion is understandable. The Japanese government just commissioned its largest solar farm and has registered an impressive 3.3 gigawatts of solar power under its feed-in tariff to date. However, at the same time, the government is scaling back its carbon reduction targets and launching investigations into solar developers.

Reconciling these competing issues is all about providing context.

Make no mistake: The Japanese market is huge

The Japanese market is on pace to top 6 gigawatts this year. That makes it the second-largest PV market in the world, with incredible year-over-year growth of over 300 percent. We expect the Japanese market to constitute about 15 percent of global demand over the next five years.

But what about these failing developers?

Japan established an incredibly attractive feed-in tariff (FIT) of $0.43 per kilowatt-hour in 2012. In addition to being lucrative, this feed-in tariff also had virtually no requirements limiting who could apply.

The rationale here was simple: the Japanese government was seeking to fill a massive capacity shortfall left from powering down the country’s nuclear fleet, and they needed that capacity as quickly as possible.

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