Japan to Cut the Cost of Solar 50% Creating Greater Self-sufficiency

Japan imports a lot of its raw materials and fossil fuels are no exception. The country however is the 2nd largest global market for solar energy, and is home to some of the largest solar component manufacturers, including Sanyo, Kyocera, and Sharp.

The Japanese government will introduce tax credits and subsidies to encourage household use of solar energy starting next year. The details will be determined in August when the budget is created. The incentive will decrease the cost of a solar photovoltaic system by an estimated 50% within 3 to 5 years.

This initiative will make solar energy especially appealing because the cost of electricity in Japan is already over $.20 a kWh. This is roughly double the rate of electricity found in many areas of the US. Increased production of solar components can help the cost to decrease by creating an economy of scale. This solar incentive will also assist Japan in becoming more energy independent and less reliant on volatile fossil fuel markets.

Japan & Energy
The country imports a majority of its energy. Japan has virtually no oil or natural gas reserves within its borders and is the 2nd largest importer of crude oil. All of the coal used within Japan’s borders is imported. With 55 nuclear reactors, Japan has the 3rd largest generating capacity behind the US and France.

A mere 9% of Japan’s electricity is generated from hydroelectric power and a majority of the sites with good generating capacity have been exhausted. Although this is the main source of self-sufficient electricity, significantly expanding production is not an option.

Japan’s Climate Change Initiatives
Prime Minister Yasuo Fukuda has shown interest in combating climate change and will be the host of the G-8 summit in August. Japan set a long-term goal of reducing carbon emissions by 60%-80% by 2050. Although the public supports reducing greenhouse gas emissions, Japan is currently not on target to meet the goals created in the Kyoto Protocol. Solar energy can help reduce the production of electricity from fossil fuels, thus reducing emissions.

Economic Impacts for Japan
A quarter of the world’s solar cells are manufactured in Japan, a trend that is likely to continue as the domestic market increases. Germany, the largest global market for solar photovoltaics has generated over 10,000 jobs in production, installation, and distribution.

A boost in Japanese solar electricity output will help keep energy dollars within the Japanese economy that are currently leaving the country for the purchase of fossil fuels. As electric vehicles become more prevalent, electricity will increasingly be needed to power automobiles, helping to reduce reliance on foreign oil.

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Photo Credit (lower image): Solar Service Inc.

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