Through the Roof: Japanese Solar Power Installations Explode in 2009

After the federal government increased domestic incentives for installing solar power, solar panel sales (by capacity) rose to a record high in Japan last year.

According to data accumulated by the Japan Photovoltaic Energy Association (JPEA), 1.39-gigawatts worth of solar panels were sold in 2009.  This total not only represents a 21% increase from 2008 installations, but also the largest amount of sales ever recorded by the JPEA.

Last year, domestic sales more than doubled (483.96-megawatts); this can be attributed to two significant federal policies.  In April, the federal government reintroduced subsidies for households that install solar panels; and, in September, the government introduced a solar feed-in tariff that requires utilities to buy the surplus energy supplied to the grid from solar panels on houses and businesses.  With the new feed-in tariff law, utilities are paying twice what they used to pay for solar energy.

Through government incentives, solar power has become a lucrative investment.  In Tokyo, for example, federal and local subsidies can amount to almost 270,000 yen (US$3,001) per kilowatt.  It is estimated that household and business solar panel installation costs between 600,000 yen (US$6,670) and 700,000 yen (US$7,781) per kilowatt.  This means solar panels are providing Japanese investors with an incredible 38.5% return on investment.

In its desire to lower its greenhouse gas emissions to 25% below its 1990 levels by 2020, the Japanese government is planning to extend its feed-in tariff program to other clean energy sectors including wind power.

Read the full story Bloomberg:  Japan's Solar Panel Sales Rise to Record on Subsidy