It took until the third and final day of the Smart Energy Week Tokyo event for PV to enjoy its moment in the sun. The most popular portion of the show is always the PV Expo Japan exhibition, and so in a textbook example of saving the best until last, the PV keynote speech was held this morning in a packed reception hall at the impressive Tokyo Big Sight venue.
Judging by the number of enrapt attendees forced to sit on the floor because the 1000+ seats were all occupied, anticipation for the presentation by the Ministry of Economy, Trade and Industry (METI) renewable energy promotion office head Nobuhiro Watanabe was running high.
Watanabes presentation did not reveal anything the industry did not already know that the Diet is discussing proposals to roll back Japans FIT and introduce a reverse auction mechanism to reflect falling system and Capex costs but the minister was able to explain the reasons behind some of its proposals.
He returned again and again to three key concerns that METI has regarding the energy sector: number one to minimize the public burden; number two to remove grid restrictions, and number three to ensure that renewable energy is truly integrated into local communities.
90% of the FIT is basically industrial and commercial PV, so we need to get a better balance whenever PV is installed, Watanabe said. We have to reduce that burden on citizens, so PV has to become more cost-effective.
Following Watanabe was U.S. Department of Energy program manager for PV R&D, Becca Jones-Albertus, who delivered a talk on how the Sunshot Initiative in the U.S. is transitioning the country towards ubiquitous solar. Jones-Albertus shared with the audience the DOEs roadmap for not just $0.06/kWh solar, but $0.03/kWh solar. The key message being: higher efficiencies can only do so much in lowering the cost of solar. Durability and reliability needs to improve significantly if solar is to really deliver continued cost savings.
With this in mind, pv magazine spoke to the great and good of the solar industry at the show, and here is a selection of the key comments and thoughts on the Japanese market from some of solars most respected voices.
Solar always finds a way
Andreas Liebheit, SVP and global business manager, photovoltaics, Heraeus
We have always been impressed by how strong and sustainable solar markets prove to be, even with policy change. 2016 will be a strong year for Japan. We will maybe see more than 10 GW, and maybe next year it will drop to 9 GW, but that is still very high eight times more than Germany, for example.
In the longer term, the Japanese mentality is to look ahead, and there is a lot of innovation here, particularly in the Smart Grid exhibition hall. There you see how things are connected, how hybrid systems are evolving, and you have Toshiba, Mitsubishi and Huawei are building systems that are not based on FITs or reliant on political support, but offer a sustainable supply of energy.
These self-sustaining markets will drive a stable Japanese market for many years. In the Fuel Cell hall there is an emphasis on continuous supply of power. This is a big issue in Japan having uninterruptible supply of power is a huge topic after Fukushima. Many of those systems sell because of homeowner and company worries about power outages. This is not a huge worry in many other markets, but here in Japan it exists, and it is an area where solar can help.
Quality-conscious market
Max Von Romatowski, managing director, SolarWorld Asia Pacific
Even with the FIT declining, SolarWorld is gaining market share. Other players are disappearing but were getting stronger. Japan understands quality, and we are three to four years ahead of the competition, especially when it comes to our glass-glass modules and BiSun technology. Here, these products have been welcomed warmly.
This is perhaps the most quality-conscious market in solar, and SolarWorld meets this demand, its a perfect match for us. As soon as a FIT is ending and the model changes into a saving model, this is what all markets have to adapt to after a while. SolarWorld has applied lessons learned in Germany here in the Japanese market, so we offer storage for self-consumption and high efficiency modules based on PERC technology this is how you survive a post-FIT landscape.
Attention is turning to high efficiency
Lei Shi, deputy general manager for Shanghai Aerospace
We are continuing to focus on n-type high efficiency module that provides high value for the customers, and this is ideal for the residential market here in Japan. The Milky Way Twin Star bifacial module is our N-type PERT module that we are introducing in Japan.
Japanese customers like to have high technology and high efficiency, and they have limited surface use, so it is important for us to focus on high efficiency to maximize rooftop space. This has really driven our strategy for the Japanese market.
Delivering cost reduction independently
Justin Xi, executive general manager, Seraphim
We have introduced the Seraphim Eclipse module at the show here, and we think it is ideal for Japan for many reasons.
Independent of other providers, we looked at how we can improve the assembly process rather than focus on using new materials. This was our thinking on the Eclipse. The efficiency is not based on cell efficiency increase: the panel uses a normal cell accessible all across the market. If we implemented PERC cells in the module we could go up to 340 W, but we decided not to do this so as not to be reliant on another technology where we cannot control costs. We want to be more independent and able to increase our efficiency with our own technology.
Japan is like a home market for us
Shawn Qu, Canadian Solar CEO
Japan is like a home market. Since 2013 Canadian Solar has been the largest non-Japanese brand in this market. For three years we have been strong here, particularly in the residential market, offering total solutions for rooftops and EPC for small commercial installations.
"We shipped close to 800 MW into Japan last year. Thats quite significant. This market values the brand, the long-term sustainability better than any other market, which gives Canadian Solar a chance to demonstrate its strengths.
Change happens to any market, especially in solar. Im not surprised by Japans policy changes, and we have always been prepared for this. For the large projects we are continuing to introduce high efficiency and lower cost panels, and even with the lower FIT we are still competitive. If the FIT drops to 24 yen, we can still enable the homeowner to enjoy the same economics. Japan has also started to put more effort to promote Zero Energy Homes (ZEH) with 100% new build ZEH by 2030 this is a great opportunity for Canadian Solar to offer more products to Japanese property developers.
Residential will drive the market
Takehiro Kawahara, analyst for Bloomberg New Energy Finance
Companies have been keen this year to display their cost-effective products and ability to lower BOS and increase efficiency. This year the FIT reduction is higher relative to recent years because METI changed how it calculated the FIT. In the past three years METI used the medium value of the project costs reported by developers to have commissioned projects. But this included the projects that received the higher FIT rate METI finally realized that the project with the lower FIT rate tends to have lower Capex. So using this data METI the FIT down from 27 yen to 24 yen. The cost pressure is now on the market players.
2017-2018 will see the market shrink slightly, and bottom out before 2020, but then the residential segment, driven by more economical self consumption, will give the market buoyancy."
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