SINGAPORE/TOKYO (Reuters) - One by one, Japan is turning off the lights at the giant oil-fired power plants that propelled it to the ranks of the world's top industrialized nations. With nuclear power in the doldrums after the Fukushima disaster, it's solar energy that is becoming the alternative.
Solar power is set to become profitable in Japan as early as this quarter, according to the Japan Renewable Energy Foundation (JREF), freeing it from the need for government subsidies and making it the last of the G7 economies where the technology has become economically viable.
Japan is now one of the world's four largest markets for solar panels and a large number of power plants are coming onstream, including two giant arrays over water in Kato City and a $1.1 billion solar farm being built on a salt field in Okayama, both west of Osaka.
"Solar has come of age in Japan and from now on will be replacing imported imported uranium and fossil fuels," said Tomas Kåberger, executive board chairman of JREF.
"In trying to protect their fossil fuel and nuclear (plants), Japan's electric power companies can only delay developments here," he said, referring to the 10 regional monopolies that have dominated electricity production since the 1950s.
Japan is retiring nearly 2.4 gigawatts of expensive and polluting oil-fired energy plants by March next year and switching to alternative fuels. Japan's 43 nuclear reactors have been closed in the wake of the 2011 meltdown at the Fukushima power plant after an earthquake and a tsunami - since then, renewable energy capacity has tripled to 25 gigawatts, with solar accounting for more than 80 percent of that.
Once Japan reaches cost-revenue parity in solar energy, it will mean the technology is commercially viable in all G7 countries and 14 of the G20 economies, according to data from governments, industry and consumer groups.
A crash in the prices of photovoltaic panels and improved technology that harnesses more power from the sun has placed solar on the cusp of a global boom, analysts say, who compare its rise to shale oil.
"Just as shale extraction reconfigured oil and gas, no other technology is closer to transforming power markets than distributed and utility scale solar," said consultancy Wood Mackenzie, which has a focus on the oil and gas industry.
Oil major Exxon Mobil says that "solar capacity is expected to grow by more than 20 times from 2010 to 2040."
Investors are also re-discovering solar, with the global solar index up 40 percent this year, lifting it out of a slump following the 2008/2009 financial crisis, far outperforming struggling commodities such as iron ore, natural gas, copper or coal.
CHEAPER PANELS
By starting mass-production of solar panels, China is the driving force in bringing down solar manufacturing costs by 80 percent in the last decade, according to Germany's Fraunhofer Institute.
In Japan, residential solar power production costs have more than halved since 2010 to under 30 yen ($0.25) per kilowatt-hour (kWh), making it comparable to average household electricity prices.
Wood Mackenzie expects solar costs to fall more as "efficiencies are nowhere near their theoretical maximums."
Solar is already well-entrenched in Europe and North America, but it is the expected boom in Asia that is lifting it out from its niche.
China's new anti-pollution policies are making the big difference. Because of these policies, Beijing is seeking alternatives for coal, which makes up almost two-thirds of its energy consumption.
China's 2014 solar capacity was 26.52 gigawatt (GW), less than 2 percent of its total capacity of 1,360 GW.
But the government wants to add 17.8 GW of solar power this year and added 5 GW in the first quarter alone, with plans to boost capacity to 100 GW by 2020.
Coal-dominated India, with its plentiful sunlight, could also take to solar in a big way.
Despite this boom, fossil-fueled power is far from dead.
"Additional generating capacity, such as natural gas-fired plants, must be made available to back up wind and solar during the times when the sun is not shining and the wind is not blowing," Exxon says.
(Additional reporting by Charlie Zhu in Hong Kong, Nina Chestney in London, Christoph Steitz in Frankfurt and Osamu Tsukimori in Tokyo; Editing by Raju Gopalakrishnan)
Einstein Yep, when you import every drop of energy you use in your country is imported. Solar generated power is far more expensive than power from coal and natural gas. Japan has neither. Thank God, the US does. No need for solar here. It's niche is environmentalists who hate fossil fuels. Great, they can spend their money buying solar cells for their use. Or even better, they can build solar power plants and sell their power to the public. Assuming they can find people who want to pay more for their electricity.6-6
SweetRevenge Solar is eventually going to be embraced by everyone including the Utilities who claim it's disrupting their systems. Why? Because it requires less infrastructure, no fuel and no fluctuation in fuel costs, can be used instantly or stored and can be scaled to any scale. Think about how much your Utility companies pay for the land and infrastructure for thousands of miles of high tension power lines and hundreds of thousands of miles of other power lines, switching stations, power plants, etc..! The costs are dropping so fast that the Solar manufacturers can't keep up with the demand. China and India are adding 50+GW in the next 2-5 years alone. Battery tech is exploding and becoming a huge new industry unto itself. EV's will be the norm as they become even less expensive than gas vehicles to buy and to operate. Be a poor moron and stick your head in the sand or get some stock or employment in this industry now! 9-4
Poster Comment:
If night time electricity to cost more, battery storage at household may be alternative.