Report: Large-scale solar demand in Japan to fall as domestic PV grows to 2020

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Demand for large-scale PV in Japan will drop rapidly after 2014, while residential solar will continue growing until 2020, according to Tokyo-based market research body the Yano Research Institute.

In the latest edition of its bi-annual ‘Solar Photovoltaic Systems Market’ report, the institute argues that while the market for large-scale commercial PV will continue to grow until 2014, incrementally lowered subsidies and the lack of suitable land and grid connectivity are likely to cause a significant shrinking in the market for large-scale solar going forward.

It predicts that the Japanese domestic solar power market will be worth ¥3.16 trillion (US$31.9 billion) in 2014, before beginning to fall and arriving at around ¥1.17 trillion in fiscal year 2020. The Japanese fiscal year runs from 1 April.

According to the report, following the introduction of Japan’s renewable energy incentive programme in 2012, the Japanese market for solar power systems topped ¥1 trillion in end-user sales value for the first time, reaching ¥1.32 trillion, representing an increase of 180.9% from the previous year. In that time, the residential market grew by around 114.2%, while the commercial sector grew by 545.6%.

The report also looked at the share non-Japanese companies held in the solar cell market – finding that foreign companies held a share of around 17% in the domestic market of branded solar cell modules sold in Japan.

Traditionally Japan has been a market in which foreign companies have found it difficult to compete, due to high expected standards of production and consumer loyalty to the domestic manufacturing base. However in order to meet high demand for PV products, some Japanese companies were importing and reselling cells made abroad under their own brand names.

Nobuyuki Nakajima, general manager of communications at Japanese module maker Solar Frontier, recently explained to PV-Tech what the entry of foreign companies into the market meant in general terms: “We see an increasing number of non-Japanese players coming into this market in addition to traditional Japanese players. This means attractiveness of the market. We believe Japanese companies have a great chance to benefit from the growing value chain.”

Yano chose to survey solar cell and module manufacturers in Japan as well as solar power system integrators and retailers of residential, public and industrial solar generation systems. The company’s researchers also conducted face-to-face and telephone interviews.

The 17 leading operators surveyed included Canadian Solar, Sharp, Solar Frontier, Kyocera, Trina Solar, Panasonic and Toshiba.

The period surveyed by Yano spanned June to August 2013. The report examines several aspects of the market, in four sections: the status of solar photovoltaic systems; noteworthy issues in the PV systems market; a survey of business strategies of leading solar power market players; and the future outlook of the PV systems market.

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