In August 2012 I wrote an article in New Scientist magazine arguing that Japan could become the world's second-biggest solar power nation. The article followed the announcement of a new feed-in tariff (FIT), introduced into law to make it more appealing for new energy companies, in particular wind and solar, to enter the market.
At 42 yen per kilowatt hour for new starts, that FIT was among the highest in the world and double that offered in Germany. The tariff tripled the number of independent energy suppliers in the aftermath of the Fukushima nuclear accident, leading many to believe Japan was setting out on a new course in its energy policy.
In April 2017, just five years on, Japan changed its legislation regarding the FIT system and as a consequence "nullified some 28 million kilowatts of potential solar power generation -- enough to power 5.6 million households, or around 10% of Japan's total," according to one article in the Nikkei Asian Review.
The reason, in a nutshell, is that upon announcement the FIT set off a kind of "solar bubble," but many smaller outfits that had applied for licenses looking to take advantage of the tariff were finding it difficult to acquire necessary land or secure contracts with existing utilities who, under the FIT legislation, would be obliged to provide them with access to their power grids -- in theory at least.
One example given in the NAR article is the company Enblue, which had planned to start a megasolar project, but the licensee had failed to seal a deal with utility Tokyo Electric Power Co. Holdings Inc. Most people know the utility as TEPCO -- the company that operates the now defunct Fukushima No. 1 Nuclear Power Plant, site of the 2011 nuclear disaster.
While researching my book, "Yoshida's Dilemma," I interviewed several smaller solar operators and was made aware of a systemised effort by utilities to block solar projects from their grids. Just three years into the 20-year FIT program, utilities already had started to block renewable projects from their transmission grids reportedly, I was told, to free them up for the restart of nuclear power.
According to one official at Greenpeace, Japan was thus "in limbo" with regard to its energy policy, which was brought about by “a lot of pressure" by the government of Shinzo Abe to restart nuclear reactors.
“A lot of effort is being put into this direction while we see that renewables, especially wind power, is being blocked in Japan,” said Greenpeace radiation expert Jan van de Putte. Five of Japan's utilities companies have announced “a clear strategy” that they will not allow renewables to connect to their grids, stymying the growth of renewables such a solar and making Japan reliant once more on an aging and increasingly dangerous energy source with an “uncertain” future, he added.
The NAR article suggests that the new legislation announced in April makes that future even more obscure. By cracking down on licensed solar power providers who never began operations, the new legislation "could set back renewable energy development in the country and put more facilities in the hands of a few major players," the article states.
One reason a number of these smaller operators held back on commencing their businesses was a hope that solar panel prices would fall, which indeed they have, by nearly 50%. But still only around 40% of licensed operations are actually doing business. One major reason is the astronomical costs of connecting to the grids -- when utilities allow operators to do so, that is.
"Utilities have shown ambivalence about renewable energy," the NAR article states. "Output from solar and wind farms varies widely based on weather, making it tougher to regulate overall power supply. Times of high production can put stress on transmission lines, while a lull requires fossil-fuel power plants to provide backup."
The FIT legislation reform effectively sifted out licensees who, at an estimated 28 million kilowatts of potential solar power generation, were holding a potential generating capacity close to Japan's current solar power production. This has made the chances of another megasolar construction boom "close to nil" the article states, and makes the government's aim to have renewable energy account for 22-24% of Japan's total electricity output by fiscal 2030, a target that requires adding 40 million kilowatts of capacity, all but impossible. Unless, of course, other renewable forms of energy are given a fighting chance. Even so, Japan's solar future does not look as sunny as it did five years ago.