Japan Solar Market Forecast to Reach Nearly $19 Billion

Japan is expected to become the world’s largest solar energy market this year, with the installation of new solar power systems more than doubling capacity, a recent report by a U.S. research firm says. The domestic solar power market is forecast to reach $19.8 billion (¥1.91 trillion) in 2013, surpassing Germany, which was the biggest market from 2009 to 2012, according to the report by IHS Inc.

An estimated 5.3 GW of generation capacity will be added this year, supplying output roughly equivalent to five nuclear reactors. While that is exceeded by the 6.8 GW of new solar power systems projected in China this year, the price of the equipment is expected to make Japan the largest market in terms of value, the report said.

The use of solar power in Japan has accelerated since the so-called feed-in tariff scheme for renewable energy was introduced in July 2012 to help offset the loss of nuclear power caused by the repercussions of the Fukushima disaster, which has led to nearly all of the nation’s 50 reactors to be idled over nuclear safety concerns.

In the first quarter alone, a total of 1.5 GW worth of solar power systems were installed, up from 0.4 GW in the same period last year. Installations in Europe declined 34 percent due partly to falling prices for solar electricity sales conducted by power firms, IHS said. While global suppliers in the solar power industry are being drawn to Japan’s market, domestic firms continue to dominate the market for residential systems, which account for nearly 40 percent of all demand in the country, because consumers are showing a strong preference for domestic brands, IHS said.