The Japanese Photovoltaic Market

Introduction, Analysis and Outlook

Photovoltaic Market I: Worldwide Development

Market growth boosted by subsidies

In 2007 the market grew by 60%

Biggest markets are

Germany, Spain, Japan, USA

As subsidies conclude in 2005 Japanese

market declined by 36% in 2007

205MW 210MW

341MW

1100MW

USA Japan Spain Germany

PV generated energy output 2007

Photovoltaic Market II: The Japanese Market

Declining market since 2005

Subsidy program concluded in

2005

Downward trend in detached-

house market

Strong € makes export more

attractive

Silicon shortage leads to lower

solar cell production

Decline in Japanese world market

share to 23%

In 2009 Japanese subsidy

program is reinstituted

Photovoltaic Market II: The Japanese Market

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

4,500,000

5,000,000

un

its

2005 2006 2007

PV Modules Output 2005 - 2007

Quantity produced Quantity imported Quantity shipped Quantity in stock

Photovoltaic Market II: Japanese Manufactures

Big Players

Kaneka Solartech

Kyocera Corporation

Mitsubishi Electric

Mitsubishi Heavy

Industries

SANYO Electric Company

Sharp Corporation

Showa Shell Sekiyu

Kyocera Mitsubishi Sanyo Sharp

Production 2006

Kyocera Mitsubishi Sanyo Sharp

Production 2007

Photovoltaic Market II: Japanese Manufactures

Smaller Solar Cell & Module Manufacturers

Clean Venture 21

Fuji Electric Systems Co. Ltd.

Hitachi

Honda Soltec Co. Ltd.

Kobelco (Kobe Steel)

Kyosemi Corporation

Matsushita Ecology Systems

MSK Corporation

Space Energy Corporation

Tokuyama Corporation

YOKASOL

Funding I: Funding Bodies

Governmental funding through subsidies

Funding supported by METI

PV part of government programs

New National Energy Strategy for 2030 (energy security)

Cool Earth 50 (reduce global CO2 emissions 50% by 2050)

Direct influence of METI on solar industry’s RnD building production sites

Development supervised by New Energy and Industrial Technology

Development Organization (NEDO) an Independent Administrative Institution

Academic and Industrial

JPEA lobby

Funding II: Governmental Subsidies

9 billion yen subsidies in Q1/2009 for home equipment

70,000JPY/kW subsidy to households

Forecasts of 35,000 applications being filed in Q1/2009

20 billion yen subsidies government budget proposal (not passed yet)

Subsidy raise by Kanagawa prefectural government

Raise from currently 35,000JPY/kW to 65,000JPY/kW

Maximum total subsidy raise from 120,000JPY to 240,000JPY

See slide notes for further information

Funding II: Governmental Subsidies (Market Formation)

Prospects

Local government support continues for residential market

• 319 municipalities in 2006 own subsidy or preferential loan

programs

Increasing interest from companies & local governments

Large potential

Procedural and installation difficulties

Specific NEDO field test project for industrial and public market

Top-down government initiatives

First new power plant-type PV installations since 1995

Funding III: PV Promotional and Awareness Campaigns

Project for Promoting the Local Introduction of New Energy (FY 1998 – open)

NEDO Photovoltaic Program

Eligible are Local Governments and Non-profit organizations

Aim: Accelerate introduction of renewable energy

Subsidies up to 50% of equipment /facility costs

Subsidies up to 20mio JPY for dissemination

Infrastructure I: Operational PV Installations

2002 to 2010 field test in Ota city (Gunma) conducted by NEDO

550 houses (2,200kW) equipped with solar panels through 9.7 billion yen

study

Current residential PV installations (e.g. housing by Sekisui House Ltd.)

Various prototype / field test applications (street lights, eneloop bicycles, etc.)

Infrastructure II: Future PV Installations

Chubu Electric Mega-Solar power plant in Taketoyo, Aichi prefecture

ESCO Yamato Energy Mega-Solar power plant in Miyazaki prefecture

Tokyo Electric Power K.K. and Yamanashi prefecture plan solar power plant

to be operational by 2011

Shikoku Electric Power plans Mega-Solar power plant extension in Ehime

prefecture (phase I to be finished 2010; phase II to be finished 2020)

70% of new residential buildings planned for solar panel installation

See slide notes for further information

Photovoltaic Market Forecasts 2009

Expansion in production leads to

oversupply in 2009

Module installations expected to rise by

10%

Module revenues expected to fall by 20%

due to competition on overproduction

Module prices expected to decline forcing

small companies out of business

Revenues and prices expected to

rebound in 2010

Growth in 2011 and 2012

Forecast by iSuppli

3.8

7.7

4.2

11.1

2008 2009

Solar Module Supply and Demand Forecast 2008-2009

PV Module Installation (GW) PV Module Production (GW)

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