Japan Market for Large-Scale Solar to Drop After 2014, Yano Says

Japan’s market for solar panels used in industrial-sized projects is expected to contract quickly after fiscal 2014 due to a lack of space and fewer incentives, Yano Research Institute said.

By fiscal 2020, demand for utility-scale and commercial solar systems will contract to 200.7 billion yen ($2.03 billion) after reaching 2.3 trillion yen in fiscal 2014, the Tokyo-based researcher forecast in a Sept. 24 statement. Japan’s fiscal year starts on April 1.

Lower incentives for solar power producers and a lack of land may lead to the rapid drop in the non-residential market, the researcher wrote.

Japan introduced an incentive program for clean energy in July 2012 to diversify its energy mix, leading to a surge in solar installations across the country.

“Many Japanese solar panel makers see the expansion of the market for solar power generation systems after fiscal 2012 as temporary after the introduction” of the incentive program, according to the statement from Yano.

Given the outlook, Japanese manufacturers are reluctant to expand production capacity and are instead turning to foreign makers for panels that can be sold under their own brands, according to Yano.

Residential accounted for about 80 percent of Japan’s solar market until fiscal 2011, according to the researcher. Non-residential solar increased to nearly half of the market in fiscal 2012, it said.

New homes will be an area of growth, according to Yano.

To contact the reporter on this story: Chisaki Watanabe in Tokyo at cwatanabe5@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net

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