Japan hits record in solar cell shipment

A recent survey conducted by the Japan Photovoltaic Energy Association (JPEA) (Tokyo, Japan) reveals that solar cells with a combined capacity of about 83.26 megawatts (MW) were shipped to the domestic market during April to June this year.

This record shipment, which represents an 82.5 per cent increase on a year-on-year basis, has been triggered by a growing demand from the household sector. About 90 per cent of the shipment was for household usage and powered approximately 20,000 homes.

The Japanese government hopes to generate more than 4,800 MW of solar energy through 2010. As early as 2005, households opting for solar power were granted subsidies of 5 per cent, after which one in every 100 homes switched to the alternative energy source.

Japan aims to increase this number to one in 25 homes by 2010, and then to one in four homes by the end of 2020. However, the solar energy subsidy was withdrawn in 2006, after which demand for individual use declined, since many people decided to wait for the costs to drop.

Japan revived the subsidy scheme in January this year, under which each household photovoltaic installation is eligible for a grant of USD700 per kilowatt (kW) of solar panel. The subsidy will cover roughly 10 per cent of the infrastructure costs of a standard 3.5-kW solar power unit.

To promote use of solar energy in households, Japan is also looking to create a framework for power companies to purchase surplus power from the household sector.

The global photovoltaic industry saw significant activity in 2008, recording a 79 per cent rate of growth to account for 5,500 MW of power generated during the year. However, overselling in 2008 resulted in 2009 starting with opening inventory levels of 2,000 MW on the supply side.

Most of the trade was directed to Spain, which accounted for 42 per cent of the total global photovoltaic sales in 2008, with volumes up to 2,300 MW flowing into the country. This has rendered the Spanish market inaccessible for the next couple of years, and Germany as the only market capable of handling these trade volumes.

Escalating raw material costs during 2008 also paved the way for development of thin-film technologies, which are likely to cut the cost of silicon-based products in the long run.

Market trends also indicate that the sector can achieve continuous growth only when both costs and demand are controlled. Costs are directly linked to product pricing, skilled manpower, and the nature of incentives offered in the sector, which drive the demand for photovoltaic products.

In addition, grid connectivity of standalone photovoltaic installations is also expected to govern growth in the sector.

Although the photovoltaic industry has seen considerable progress in the last five years, it is unlikely that the growth rate will be sustained in 2010. High inventory levels and the global economic downturn, combined with a saturated Spanish photovoltaic market and a tight lending market, will play a major role in the future growth of this sector.

Japan presently accounts for 40 per cent of global solar-cell production, with the main players being Kyocera Corporation (NYSE:KYO) (Kyoto-Shi, Japan), Sanyo Electric Company Limited (OTC:SANYY) (Moriguchi, Japan), Sharp Corporation (OTC:SHCAY) (Abeno-Ku, Japan), and Mitsubishi Electric Corporation (TYO:6503) (Chiyoda-Ku, Japan).

The Japanese government is aiming for a 40-fold increase in solar energy production by 2030, and is looking to get to the tenfold mark by 2020. It remains to be seen if these targets will be achieved, given the current market scenario.