Japan will overtake the USA and Germany and become the world’s second-largest photovoltaic market in 2013 according to latest figures from IMS Research.
According to the company’s The PV Market in Japan report, “overly generous” government feed-in tariff incentives combined with planned large-scale – or mega-solar – installations will create a booming PV marketplace in Japan this year.
The nation is expected to exceed one gigawatt of solar capacity installed in the first quarter alone and reach five gigawatts by year’s end; a growth rate of 120 percent.
“At ¥42 (AUD$0.43) Japan’s FIT is by far the most attractive globally – overly generous perhaps, which could lead to overheating of the market,” says Ash Sharma, senior director of solar research at IHS.
The report states such a high feed-in tariff rate cannot last and is tipped to fall by 10 percent by the 1st of April. Although domestic suppliers of solar panels and inverters have enjoyed healthy returns under the arrangement, a residential solar power system in Japan costs roughly twice as much as a German model. This is not expected to affect growth in 2013, as owners of solar power systems who have applied to join the program before the predicted cut-off will still be eligible for the higher rate.
“Mega” solar projects, those larger than two megawatts in size, will account for 25 percent of solar component demand in 2013. But this segment of the market is expected to wane next year, with the slack being taken up by commercial rooftop solar power systems of 10-50 kilowatts in size.
According to Frank Xie, report co-author and IHS senior analyst for PV and solar research:
“Government policy is in clear support of these projects while the country grapples with severe energy shortages following its shunning of nuclear power. However, this is likely to be short-lived and decline after 2014 once the current pipeline of approved projects is completed, largely because of a shortage of land in the country.”
IMS Research was recently acquired by IHS Inc.
