The booming Japanese PV market may not become the largest for new capacity additions in 2013, yet it is expected to become the world’s largest market in revenue terms, according to IHS.
The market research firm said in a new report entitled, The Photovoltaic Market in Japan, that Japan's share of global PV system revenue is expected to increase to 24% in 2013, up from 14% in 2012. The figure before Japan introduced a new feed-in tariff system stood at 9% in 2011. A total of 1.5GW worth of PV systems were installed in Japan in the first quarter of 2013, up from 0.4 GW during the same period last year.
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IHS forecasts Japan will lead in revenue terms, installing US$20 billion worth of PV systems in 2013, up 82% from US$11 billion in 2012.
With some of the highest FiT rates, PV system prices are the most lucrative in the market today, IHS said.
“Following the earthquake and tsunami in 2011 that led to the shutdown of nuclear facilities and a shortage of electricity, Japan has aggressively moved to promote solar energy,” said Sam Wilkinson, solar research manager at IHS. “Japan’s government has introduced a highly attractive feed-in tariff to help stimulate solar growth. In contrast, the European market that historically has led global solar demand is slowing as regional market conditions become less attractive. The deceleration in Europe and the implementation of the FIT in Japan are combining to propel the country to the top of the global solar market this year.”
In contrast, IHS noted that Germany, which had been ranked first from 2009 through 2012, would drop to third place in 2013, while installations in Europe were said to have declined by 34% year-on-year in the first quarter of 2013.
Europe was said to have accounted for 40% of global demand, down from 70% just one year before, and its share is forecast to continue falling during 2013.
However, as is typical in many market sectors in Japan, a strong preference by Japanese consumers is to pick domestic brands. PV is said to be no different and in respect to the PV residential market, creating partnerships with local suppliers is essential, according to IHS. The residential market is expected to account for almost 40% of demand in 2013.
However, recent figures compiled by Japan’s Agency for Natural Resources and Energy highlighted that around 75% of new PV capacity since April 2012 had been attributed to residential rooftops.
IHS is expecting a boom in larger, commercial- and utility-scale installations going forward, lowering the overall share of the residential market.
“Although international suppliers have only been able to win limited business in the residential sector, mostly by supplying local suppliers through agreements with original equipment manufacturers, the situation for larger systems is quite different,” Wilkinson said. “The fastest-growing market segment is forecast to be systems larger than 1MW , which is expected to grow by more than 500% in 2013. International PV module suppliers have been more successful in partnering with local project developers and have been able to ship large volumes to Japan to serve this market.”