Under pressure to resign as leader of a country ravaged by earthquake, tsunami and nuclear meltdown, Naoto Kan’s last act in August 2011 was to transform Japan’s energy policy. Declaring the need to “start from scratch,” he froze Japan’s nuclear program and redirected the country toward renewables. That policy change has since sparked a solar boom, setting up Japan to surpass Germany as the world’s largest photovoltaics market by revenue this year, with sales nearly doubling to $20 billion, according to an IHS report. Solar panels are popping up everywhere, breathing new life into the battered global solar industry.
|Quarter-over-quarter increase in sales to Japan reported by Canadian Solar Inc., based in Guelph, Ont.|
At the time of the 2011 Sendai earthquake, Japan was the world’s third-largest producer of nuclear power, but even prior to the meltdown at the Fukushima Daiichi power plant, the Japanese people were apprehensive of nuclear, says Mark Manger, an assistant professor of political economy at the University of Toronto. “This is the only country that has ever been bombed with nuclear weapons. It’s the only country where you have a generation that really knew what radiation damage meant. There is a very clear majority in favour of just shutting down the nuclear plants.”
But Japan is also more dependent on energy imports than any other industrialized nation. Since idling all but two of its 50 commercial nuclear reactors, Japan has had to meet its power needs through pricey imports of liquefied natural gas, which contributed to an unprecedented current account deficit of three straight months beginning last November. As a result, the shift has taken on an added urgency.
Last year, Japan implemented a feed-in tariff, which promises solar producers a subsidized price, at twice the going rate in Germany and France. The idea is that the industry should evolve to the point where it can compete without subsidies, says Francesco Citro, a research associate at Maxim Group in New York. “The industry starts to become more and more independent. That’s the logic.” Similar subsidies are being withdrawn in North America and Europe, hurting demand in those markets. Meanwhile, a severe oversupply of cheap Chinese panels hurt prices. Refocusing on new sources of demand—like Japan—could prove crucial to beleaguered solar companies.
Canadian Solar Inc., based in Guelph, Ont., has already taken advantage of the trend, increasing its first-quarter shipments to Japan by 75% over the previous quarter. “We are on a clear path to be one of the first solar module suppliers to return to profitability,” CEO Shawn Qu said in a recent earnings call. – Tim Shufelt
75% Quarter-over-quarter increase in sales to Japan reported by Canadian Solar Inc., based in Guelph, Ont.