Newly elected Democratic Party of Japan appears to be good news for the country’s domestic PV market November, 2009: On Aug. 30, the Democratic Party of Japan (DJP) swept national elections in the island nation, setting the scene for party leader Yukio Hatoyama to take over as prime minister on Sept 16. What could the emergence of the DJP, arguably more environmentally friendly than the more-business oriented Liberal Democratic Party (LDP), mean for Japanese PV? Given the DPJ’s environmental concerns, perhaps a lot. But the LDP could be a hard act to follow. In an attempt to recapture Japan’s once legendary dominance in installed PV capacity, it breathed new life into a subsidy program last January. On top of that, it more recently began work on a PV feed-in tariff. Still, the DPJ’s pledge to slash greenhouse gas emissions by 25 percent by 2020 compared to 1990 levels would seem to indicate it intends to do more than its predecessor. But oddly, nobody is talking. None of the country’s leading PV manufacturers were willing to comment. Even the Japanese office of Greenpeace, which has been singing Hatoyama’s praises, did not respond to repeated phone calls or emailed questions. When the DPJ was contacted, the best a spokesperson could offer was a reference to the DPJ’s manifesto. A serious recommendation? And indeed the Aug. 18 document indicates the party is serious about solar. It not only talks about subsidizing the purchase of solar panels for residential homes and other buildings, it calls for fixed prices on renewable energy sources to cover a mandatory purchase of all generated electricity, »not just surplus power.« That last part is most likely a comeback to the LDP’s planned addition for support, a scheme that now turns out to be its renewable energy swan song. That feed-in tariff is slated for introduction by Japan’s Ministry for Trade and Industry (METI) in November. According to Takashi Kawabata of METI’s newly established PV Policy Development Office, the tariff will pay ¥48 (52¢) per kWh for residential systems and ¥24 (26¢) for systems on non-residential structures for 10 years – but only on surplus electricity not used on the premises. It is to be funded by a 0.1 surcharge per kWh on electricity rates. The tariff would start degressing in FY2011, probably by about 12.5 percent, says Kawabata. The idea is for the feed-in tariff support to be combined with the PV subsidy program. That subsidy covers ¥70,000 ($753) per kW for systems on residential roofs. Since starting up at the beginning of the year, it has attracted nearly 75,000 applications, equal to about 270 MW (based on a METI system average of 3.6 kW) if all ended up being installed. The Japanese Diet has funded it with ¥47 billion ($505.5 million), which includes a supplement for FY2009 and 2010 (see PI 8/2009, p. 30). Kawabata considers the combination of subsidy with the feed-in tariff incentive a winner, with an estimated payback of 10 years for newbuilds and 15 or 16 years for existing structures. But there could also be trouble ahead. While the feed-in tariff is designed to cover 450,000 systems, the subsidy on equipment is currently limited to 210,000 units, of which just under half, 100,000, is dedicated to FY2009. By the end of September, however, halfway though the fiscal year, the ever-increasing interest in the subsidy program had led to just under 52,500 applications. With September being its most successful month yet, it is very likely that the 100,000-unit cap will be outstripped well before March 31, 2010 rolls around, ending that support at least temporarily. And that’s the rub. With both the incentive and subsidy supporting domestic solar introduction, the danger is that human nature kick in to put the brakes on an increasing domestic PV market. The problem is that even if the feed-in tariff alone were enough to support the financing of a PV installation – quite possible especially if the DPJ institutes upgrades to the current plan – consumers are likely to balk at going with PV, feeling cheated that they cannot get access to the subsidy. And if that happens, PV in Japan could be in for a rollercoaster ride. As of late September, Kawabata says his office has not received any policy directives or guidelines from its new boss. Until the DPJ decides to go beyond its manifesto by making public announcements that recognize and correct the danger to its domestic PV market, the future of PV in Japan will most likely remain hidden behind a mask of uncertainty. William P. Hirshman © PHOTON International, November 2009 Duplicate only with allowance of PHOTON Europe GmbH, Aachen, Germany  back