Why is Japan lagging in solar-energy field?


In the renewable energy industry, how does Japan compare with the rest of the world?

While Japan was long the world’s leader in both domestic solar-power output and the manufacture of solar- power equipment, it lost its top spot in 2005 just as the market surged, mostly in Europe.

Here, Kimio Yamaka, chief researcher and director general of the economic and industrial research department at the semi-governmental Development Bank of Japan, answers some key questions concerning this fast-changing sector in an interview with Tomoko Otake.

Why was Sharp, for years the world’s largest solar-power equipment manufacturer, overtaken by Germany’s Q-Cells in 2007 and is now also closely trailed by makers in the United States and China?

Because in the past few years the market has grown at a much faster rate than many people here had imagined. In 2004, Germany started “feed-in tariffs” (see lead story), which led to a severe shortage of the silicon used for solar cells. Q-Cells of Germany and Suntech of China, which have boosted output dramatically in the last few years, betted on an enormous market growth and procured enough silicon. These are startups, so they can make speedy decisions, while most Japanese players are large electronics makers, and their top managers could not move fast enough. Also, to make solar panels, silicon, a chemical element abundant on Earth, needs to be refined, but major silicon makers are reluctant to boost production because they are worried about excessive debt, which they suffered after the late-1990s IT bubble burst.

Are materials other than silicon being explored?

Yes. The price of silicon has jumped 10 times in the last few years, to $400-$500 per kilogram. Now the biggest challenge to solar power is the cost of silicon. Since silicon suppliers demand a long-term procurement arrangement of seven to 10 years with solar-power equipment makers, the prices are not coming down. So new technologies that use less silicon or use no silicon at all are being developed worldwide. These include the so-called thin-film silicon technologies, which use only one-hundredth the amount of silicon compared with conventional equipment. (In thin-film technologies, a thin layer of silicon or other photovoltaic material is coated on plates of glass or stainless steel.) Thin-film materials other than silicon include cadmium telluride, which is a crystalline compound formed from cadmium and tellurium. The U.S. venture company First Solar has grown through using these kind of solar cells.

Are Japanese technologies competitive?

Japan still has an edge, with a long history in thin-film technology. The chemicals company Kaneka Corp. has developed a thin-film silicon technology that can convert 12 percent of solar energy to electricity, which is quite a feat, considering that other thin-film technologies have energy conversion efficiencies of less than 10 percent. Kaneka’s goal is to boost the conversion rate to 14 percent, whereas Sharp Corp. has opted for quantity and has chosen to produce a massive volume of its less- efficient versions, hoping demand is there.

Are the Japanese government’s recently announced goals — to boost installed solar-power production capacity by 40 times by 2030, and to halve the price of solar-power equipment for homes from the current average of ¥2.3 million per household in three to five years — achievable?

I think so. With Sharp’s plan to build “mega solar” power plants in the city of Sakai, Osaka Prefecture, and with Kaneka’s efforts to boost energy-conversion efficiency to 14 percent, I think solar power systems will soon become widely available. (In that plan, part of a “Cool City Sakai” initiative involving the municipality and Kansai Electric Power Co., Sharp will provide a total of 28 MW of solar-power electricity, making the facility one of the biggest in the world. Operations are to begin in March 2010.)

What are other sources of renewable energy that will become widely available to the public in the near future?

Japan is far behind other countries in wind power, partly because windy locations are limited. Solar-powered heating, on the other hand, has a big potential, but it is underutilized. Solar-powered water heaters are very energy efficient and are used in many parts of Europe, with some governments mandating the systems be installed in new homes.

In Japan, unethical business practices by some makers in the 1980s have tainted the image of the entire industry (resulting in withdrawals from the business by many makers, and thus no maintenance services provided for many users). But the Tokyo Metropolitan Government (which aims to raise the use of renewable energy to 20 percent of its total energy consumption by 2020) is aiming for increased use of solar-energy heat, and is planning to introduce a mechanism through which energy saved by using “green heat” could be traded. If the Tokyo government’s program starts from next year as planned, it would be a pioneering move.