Japan Set to Overtake Germany as World’s Largest Solar Market

Japan is set to overtake Germany as the world’s largest solar market by annual installations this year as government incentives to encourage clean energy after the Fukushima nuclear crisis attract investment.

Developers may install 6.9 gigawatts to 9.4 gigawatts of solar in 2013, according to data compiled by Bloomberg. Germany led solar installations in 2012 with 7.6 gigawatts of capacity.

The outlook from Bloomberg New Energy Finance revises the lower end of a forecast by the London-based researcher, which earlier called for Japan to install 6.1 gigawatts to 9.4 gigawatts of capacity. Based on the most conservative estimates, BNEF previously said China would edge out Japan as the world’s largest market this year.

The change comes after the Japan Photovoltaic Energy Association announced that Japan’s domestic shipments of solar modules rose 73 percent in the first three months of the year compared with the previous quarter, according to the report.

The rise in shipments is due to the “generous” rate solar power producers receive in an incentive program that started in July, according to BNEF. Japan’s solar tariff is currently 37.8 yen (38 cents) per kilowatt hour for 20 years, more than twice those of China and Germany.

Japan’s energy needs are in the spotlight after the Fukushima disaster prompted the idling of all but two of the nation’s 50 nuclear reactors. Solar has proven the most popular new energy because it can be built quicker than other forms such as geothermal or wind, both of which need an environmental impact study before construction.

China will add 6.3 gigawatts to 9.3 gigawatts of solar this year, trailed by the U.S. at 3.7 gigawatts to 4.3 gigawatts, according to BNEF’s estimates. One gigawatt equals 1,000 megawatts.

“Unless the Chinese government moves very quickly to clarify its solar premiums for roof-mounted projects, or Japanese project developers move more slowly than expected, Japan will be the world’s largest PV market in 2013,” BNEF said.

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