|

Despite headwinds, solar energy making progress, advocates say

by Eric Johnston

Second In A Series

Japan’s largest solar panel plant is in full swing in Kunitomi, Miyazaki Prefecture, daily churning out up to 16,000 30-sq.-cm solar panels that have a conversion efficiency rate of more than 12 percent.

That may not seem like much, but by industry standards it’s competitive. Brooks Herring, an executive officer at Solar Frontier, the plant’s operator, also points out that the production method at the ¥100 billion facility is environmentally friendly.

“No cadmium or lead is used in the production process, and the rare earth minerals we use, like indium, often come from recycled products,” he said.

As the country debates which renewable energies should replace nuclear power and fossil fuels, companies such as Solar Frontier, a wholly owned subsidiary of Showa Shell Sekiyu K.K., believe solar power will play a critical role despite its current high cost, questions about the amount of sunlight in Japan, and, crucially, political and bureaucratic resistance.

“Solar energy is expanding in Japan, and until now, both nuclear power and solar energy were promoted by politicians and policymakers as being free of carbon emissions. Now, the real issues are availability and cost,” said Solar Frontier President Shigeaki Kameda.

The company’s new Miyazaki plant is just one of several high-profile solar projects in the past few months.

In August, Tokyo Electric Power Co. opened a solar power plant in Kawasaki, which together Tepco’s nearby solar plant on Ogishima Island generates more than 20,000 kw.

And in early September, Kansai Electric Power Co. finished building the country’s largest solar plant in Sakai, Osaka Prefecture — a facility that can generate 10,000 kw, enough electricity to run about 3,000 households.

While solar panel installation continues to grow rapidly overseas, Japan’s solar power industry has a relatively short history.

A 2010 status report by the Japan Renewable Energy Policy Platform on renewable energies shows that solar photovoltaic generation shot up from virtually zero in 1996 to about 2,200 megawatts in 2009, enough electricity to power more than half a million homes. Germany, the world’s leading user of solar power, generated 5,340 megawatts the same year.

But in 2009, solar power cost ¥49 per kilowatt hour in Japan, far more expensive than wind power at ¥11 per kwh, biomass energy at ¥12.5 per kwh, micro hydro plants — small hydroelectric power installations — at ¥8 to ¥20 per kwh, and geothermal energy at ¥12 to ¥20 per kwh.

Undeterred, companies such as Solar Frontier, Kyocera Corp. and Sharp Corp. are continuing to invest heavily in research and development of advanced solar technologies that will reduce the cost.

From the late 1990s until 2004, Japan led the world in introducing solar panels, mostly on household rooftops. This was largely thanks to government subsidies.

As a result, solar power, which cost a staggering ¥250 per kwh in 1993, had fallen to ¥46 per kwh by 2004.

Prime Minister Junichiro Koizumi ended the subsidy program in 2005 following pressure from the fossil fuel lobby and free-market advocates. Japan subsequently fell to third place worldwide in total grid-connected solar photovoltaic capacity, behind Germany and Spain.

The subsidies were reintroduced in January 2009, and nationwide shipments of solar panels more than doubled from the year before. In addition, legislation was enacted in August creating a feed-in tariff that requires the nation’s 10 power companies to purchase surplus solar power. The law, an initiative of the Democratic Party of Japan-led administration, will go into effect next July 1.

The Fukushima No. 1 nuclear plant meltdowns have sparked a national debate among those who see renewable energies — especially solar power — as the future.

Masayoshi Son, founder and president of Softbank Corp., has proposed setting up a nationwide system of huge solar farms. Son estimates that panels installed on rooftops and unused prefectural land could generate a combined 100 million megawatts by 2020. His plan is strongly backed by 36 prefectural governors.

On the other hand, the fossil fuel and nuclear power lobbies insist solar energy is an unsafe, prohibitively expensive and unstable power source, as electricity output varies according to the amount of sunlight. They argue that solar energy has limited potential because of Japan’s high annual rainfall, especially from early to mid-summer when the rainy season covers most of the country.

However, a survey by the Meteorological Agency of total annual sunshine between 1970 and 2000 shows that areas including Miyazaki Prefecture, the southern coast of Shikoku and the Nagoya and Chubu coastlines had more than 2,000 hours of sunlight annually.

This compares favorably with Germany, the global leader in solar energy even though many parts of the country receive only 1,800 hours a year.

As for the expense, there is growing evidence overseas that in certain areas and under certain conditions solar energy is now cost-competitive with nuclear power.

“Since the late 1990s, the trend of costs declining in solar technology has been so great that solar energy is fully expected to be cost-competitive without subsidies within the decade,” John Blackburn and Sam Cunningham wrote in a 2010 report titled “Solar and Nuclear Costs: The Historic Crossover.” Their research in the U.S. analyzed costs for both nuclear and solar power in North Carolina.

According to their analysis, nuclear power in 2000 cost about 5 cents per kwh, while solar energy cost between 26 and 28 cents. But thanks to technological advances, nuclear and solar power costs were roughly equal in 2010. They also forecast that the cost of solar will continue to fall through 2015 to between 5 and 11 cents per kwh, while the cost of nuclear power will keep rising and exceed 25 cents.

The authors reject the U.S. nuclear power lobby’s argument that because government subsidies — in the form of a feed-in tariff — are currently needed to make solar energy cost-competitive, the industry will always require assistance. Japan’s nuclear lobby argues the same case.

“Nuclear plants likewise benefit from various subsidies. But commercial nuclear power has been with us for more than 40 years, and there are no projections that nuclear electricity costs will decline (in the future),” they added.

A 2010 survey by the International Energy Agency showed that solar power in the U.S. cost on average around 21 cents per kwh, while the cost for European Union member states generally ranged between 30 and 40 cents. In both the U.S. and the EU, subsidies were used to keep costs down, often in the form of feed-in tariffs.

Solar experts, however, point out that reducing the cost per kwh is not simply a matter of developing increasingly efficient solar panels or introducing feed-in tariffs.

Theoretically, they argue, solar energy should be much cheaper than nuclear power or fossil fuels even without subsidies, because the cost of generating power is only one part of the overall cost of creating electricity using fossil fuels.

In the case of the domestic nuclear power industry, for example, uranium is mined and processed overseas, and delivered by ship to Japan to be used for fuel. A complex transmission and distribution network then processes the fuel, and after it is used to generate power the remains have to be removed and stored.

Each step of the process reduces efficiency and increases the overall cost to consumers — a cost that can only be kept down by various forms of direct and indirect subsidies.

Japan’s regulatory system for installing solar power facilities is less than ideal, and official regulations can even discourage the widespread use and development of solar energy.

“Japan does currently have relatively high solar power costs. This is partly due to the fact that you have to design facilities with earthquakes in mind. You have to use Japanese labor, which is quite expensive. And regulations, in terms of building and electrical codes, are quite strict,” said James Plastow, Solar Frontier’s global product strategy manager.

The administrative costs incurred by domestic solar energy companies to meet Japan’s regulations are also greater than overseas, he added.

But with the passage of the renewable energy bill in August, lawmakers increasingly focused on the potential of solar power and interest growing among investors such as Softbank’s Son, the arguments against Japan embracing solar power are weakening.

“When you look at Japan’s energy situation, peak demand for electricity occurs during the sunniest part of the day, making solar a good alternative to other energy forms because it provides the right amount of power at the right time,” said Solar Frontier’s Herring.

“It’s sustainable, and Japan can generate everything domestically, from manufacturing panels to mounting systems and cables. With the right environment, it doesn’t take very long to put these systems in place.”