JAPAN PHOTOVOLTAICS MARKET OVERVIEW

Prepared for Sandia National Laboratories U.S. Department of Energy Robert Foster Southwest Region Solar Experiment Station Southwest Technology Development Institute New Mexico State University Las Cruces, New Mexico, U.S.A. [email protected] October, 2005

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TABLE OF CONTENTS JAPAN PHOTOVOLTAICS MARKET OVERVIEW ...........................................................1 DRAFT 9/30/05 ......................................................................................................................1 EXECUTIVE SUMMARY .....................................................................................................1 JAPANESE PV MARKET ....................................................................................................2 Cultural Influences ..........................................................................................................2 Customers .......................................................................................................................3 GOVERNMENT SUPPORT.................................................................................................5 Utilities............................................................................................................................7 FINANCING .......................................................................................................................8 Marketing ........................................................................................................................9 PV SYSTEM CHARACTERISTICS.....................................................................................11 Japanese PV Electrical Code..........................................................................................11 Technical Standard for Electric Facilities.......................................................................11 Design ...........................................................................................................................12 Modules ........................................................................................................................13 Inverters ........................................................................................................................14 Labor.............................................................................................................................15 GUARANTEES..................................................................................................................16 PV MANUFACTURING IN JAPAN...................................................................................17 JAPANESE PV INDUSTRY ...............................................................................................18 FUJI ELECTRIC...............................................................................................................20 KANEKA ...........................................................................................................................20 KYOCERA.........................................................................................................................21 MITSUBISHI.....................................................................................................................23 SHARP ..............................................................................................................................24 SANYO ..............................................................................................................................24 SOLAR RESEARCH AND DEVELOPMENT ORGANIZATIONS.....................................26 New Energy and Industrial Technology Development Organization (NEDO) ................26 National Institute of Advanced Industrial Science and Technology (AIST)....................28 Japan Electrical Safety & Environment Technology Laboratories (JET) ........................30 PV Module Certification................................................................................................30 Photovoltaic Power Generation Technology Research Association (PVTEC) ................32 JAPANESE PV ROADMAP ...............................................................................................33 CONCLUSIONS ................................................................................................................33 REFERENCES ..................................................................................................................35

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LIST OF FIGURES Fig. 1. Installed grid-tied PV array on Japanese Prime Minister Ichiro Koizumi’s Official Residence (Sishokante) signals to the country the government’s deep commitment to PV. .......................................................................................................................................3 Fig. 2. Japan PV installations over the past decade (RTS and NEDO). ........................................4 Fig. 3. Japanese PV installations in FY2004 [RTS & NEDO]......................................................5 Fig. 4. Average PV system price in Japan over the past decade and corresponding national government subsidy [RTS and NEDO]............................................................................6 Fig. 5. Project designer Mr. Ohashi and Osaka Waterworks Kunijima Treatment Plant with a 150 kWp PV plant (Kyocera), one of a dozen such PV water plants in Japan. ........................7 Fig. 6. PV system grid intertie (note 2 meters) in Ohta City. Inverter and battery bank are housed in the large boxes on the right..........................................................................................8 Fig. 7. Growth of Japanese residential PV system installations 1994-2004. ...............................10 Fig. 8. Consumer friendly Kyocera residential PV meter display ...............................................11 Fig. 9. Underside of typical Japanese PV array clamp mounting on metal corrugated roof (no roof penetration) designed to withstand typhoon force winds.........................................13 Fig. 10. Japanese homes with PV sub-arrays facing east, south, and west in Ohta City. .............13 Fig. 11. Total Japanese PV cell production by cell type since 1986 though 2004 [RTS].............14 Fig. 12. Four kW Omron inverter on AIST PV parking structure...............................................15 Fig. 13. Excellent workmanship is exemplified in this PV system breaker box with monitoring transducers at Ohta City clustered systems project.........................................................16 Fig. 14. Kadenko technicians troubleshooting PV system at Ohta City residence.......................17 Fig. 15. Building integrated see-through PV modules (Sanyo) at the Ohta City office complex. 18 Fig. 16. Japanese installations by sector type in 2004, dominated by residential [OITDA].........19 Fig. 17. Kaneka a-Si PV modules under test at AIST.................................................................21 Fig. 18. Kyocera’s Samurai PV system marketing campaign. ....................................................22 Fig. 19. Kyocera corporate headquarters in Kyoto with BIPV on the south wall (left)................23 Fig. 20. Mitsubishi Electric PV modules installed in Ohta City. ................................................24 Fig. 21. Sanyo corporate headquarters in Tokyo with BIPV on the south, east and west sides of this office complex........................................................................................................25 Fig. 22. Growth of key Japanese PV module producers from 1986 - 2004. ................................26 Fig. 23. AIST PV module test lab. AIST calibrates test equipment for JET................................29 Fig. 24. AIST PV benchmarking facility, with about 100 kWp of PV installed representing all major module and inverter types produced in Japan.......................................................30 Fig. 25. Sanyo inverter undergoing test certification at JET (July 2005). ...................................31 Fig. 26. JET solar simulator for PV module characterization. Modules are hung on the wire mesh. ............................................................................................................................32 Fig. 27. Japan’s PV roadmap and system price goals to 2030. The goal is for 4.8 GW PV installed by 2010 and 83 GW by 2030...........................................................................33

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LIST OF TABLES Table 1........................................................................................................................................5 Japanese Systems Prices 2004 (Yen per Wp) [RTS] ....................................................................5 Table 2........................................................................................................................................7 PV Field Test Projects for Public and Industrial Facilities [NEDO] .............................................7 Table 3........................................................................................................................................9 Residential PV system Dissemination Program Subsidies [NEDO] .............................................9 Table 4......................................................................................................................................20 Growth of Japanese PV Manufacturing since 2000 [RTS] .........................................................20 Table 5......................................................................................................................................28 National Budget of PV Power Generation [NEDO] Unit: Billion Yen........................................28

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JAPAN PHOTOVOLTAICS MARKET OVERVIEW DRAFT 9/30/05 EXECUTIVE SUMMARY Japan has the most successful photovoltaics (PV) industry and mature market in the world. By the end of 2004, Japan became the first country to install a GigaWatt of PV. Through aggressive government policies beginning with the SunShine Program launched in 1974, and more recent subsidies promoting deployments, Japan leads the world in PV production, deployment, and exports. PV powered homes are now a common site in Japan. While Japan was the third largest PV manufacturer a decade ago, it now dominates PV manufacturing with well over 40 percent of global production. The Japanese government is making solar energy an important part of its overall energy mix, with a goal of 10 percent electricity production from PV by 2030. They seek to reduce renewables costs to be on par with conventionally generated electricity. Likewise, Japan is a signatory to the Kyoto protocol and sees solar as a viable part of the solution to meeting CO2 reduction targets. There are three key reasons why Japan has become the global PV leader: • • •

Aggressive and farsighted government policies promoting PV to help meet Kyoto goals Tight R&D collaboration between industry, government, and academia Majority overseas exports helping to drive down PV manufacturing costs in-country

Individual homeowners are the most common PV buyers in Japan, comprising nearly 90 percent of the market. In Japan, there is a two-fold reason for buying PV. First, the Japanese consider it “Good to be Green” with ties to nature that are culturally embedded. Second, the retail price of residential electricity in Japan is the highest in the world, at ¥23/kWh (~US$.21/kWh). Thus, over a 20 year lifetime, grid-tied PV power is actually cost effective. While initially the government offered substantial rebates on PV installations (50 percent a decade ago), these rebates have been dramatically reduced and are being phased out as PV prices have dropped. Japan’s budget for development and promotion of PV systems has actually halved since its peak in 2002. This has been possible as PV prices have decreased, and homeowners without rebates today are paying approximately the same price they paid a decade ago with rebates. Some local city and county governments do continue to offer incentives for PV installations. The costs of PV systems in Japan are less than those in the U.S., and were about 670 ¥/Wp (~110 ¥ = US1.00 or US$6.09/Wp) installed for residential installations by the end of 2004. Japan is able to achieve lower costs through simplified balance of systems, including transformerless inverters. All equipment used is manufactured in country. Japan also has a “Customized Mass Production” technique with some housing manufacturers offering PV options on homes. Likewise, regulations are simple for PV installations and there are no special PV installers, rather ordinary electricians trained by industry install PV systems. Installations are self-inspected. The Japanese electric code for PV is very simple (one page) and not prescriptive. The Japanese rely on the industry to self-police and do a good job. If there is a problem, the homeowner can make

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claims against the warranty and company. Most Japanese companies are very responsive if there is a problem as it is a matter of honor and pride for them to do a good job. PV systems are also made easy for homeowners to use. Simple graphical displays are used so that homeowner's can see how their PV system is doing on a real-time and cumulative basis. This generates interest and participation from the homeowner, who in turns shows off his system to his friends. Systems are metered and the homeowner sees a reduction in his monthly electric bill by using a PV system. Overall, PV technology deployment in Japan is mature and there are few reported failures for the mature technologies (e.g., x-Si). The government is putting most of its funding into deployment and how to maximize power from clustered PV systems. Basic research is shifting towards thin film technologies and how to recycle PV modules. JAPANESE PV MARKET Japan leads global PV manufacturing and is also the most mature PV market in the world. By the end of 2004, Japan became the first GW installed PV nation. Through aggressive government policies beginning with the SunShine Program launched in 1974, and more recent subsidies, Japan leads global PV deployment and development. PV powered homes are now a common site throughout Japan. While Japan was the third largest PV manufacturer a decade ago, it now dominates PV manufacturing with well over 40 percent of global production. In 2004, the Japanese market itself represented about 30 percent of global PV sales. Japan also exports over 60 percent of its PV module production overseas. The rapidly growing Japanese markets and experience hold a number of lessons learned that are pertinent for other countries interested in large-scale PV deployment. There are numerous technology and policy insights that can be gained from the Japanese experience. The Japanese government has been developing a self-sustaining residential PV market free of incentives. There has been a successive annual decline in government subsidies scheduled to phase out by the end of 2005. The reason for this is that PV prices have declined over 30 percent in the last decade, and PV is now competitive in Japan, especially since domestic grid power costs about US$0.21/kWh. PV is now an attractive option for many homeowners. There are few non-domestic companies operating in the Japanese market. While there are no particular trade barriers for other companies to sell product in Japan, the national Japanese market is so competitive that most foreign manufacturers find it difficult to enter. The Japanese PV manufacturers are positioned to continue to dominate global PV production in the future. They have learned how to make it cheaper and better through mass commercialization. Cultural Influences The Japanese culture has always had strong ties to nature, exemplified through their famous gardens, poetry, etc. Likewise, the Japanese culture has always had a unique relationship with the sun, reflected on their national flag as the Land of the Rising Sun. Thus, many Japanese view the use of solar energy as in keeping with their cultural traditions. With the signing of the Kyoto Protocol on Global Warming, the Japanese also see it as a matter of national pride for Japan to meet their share of the Kyoto Protocol objectives on limiting CO2 emissions. Thus again, solar 2

energy is seen as an important part of the solution to achieving these objectives. This attitude permeates all levels of the society, from homeowners, schools, government, and industry. Most want to use solar energy on their buildings and help the country become “solarized.” Countering the effects of global warming is a mainstay of Japanese government policy. Economics for PV plays a secondary role as compared to national goals of meeting the Kyoto Protocol. The Prime Minister’s residence, as well as the Japanese Parliament and many key government buildings, all have 30-50 kW PV arrays mounted on their rooftops. There is about 500 kWp installed on key government buildings in downtown Tokyo. There exists a total commitment to making Japan a solar nation, from the government officials and planners, industry leaders, and the public. Japan has an integrated solar development approach. Also, there is a sense of need for energy independence. Since grid electric costs are the highest in the world in Japan, there is also an economic return for residential PV. The Japanese also feel that the expansion of PV power generation systems in Japan wil greatly contribute to creating new jobs and industries in the coming decades. This meets the goals of energy and industrial policies that the Japanese government is pursuing.

Fig. 1. Installed grid-tied PV array on Japanese Prime Minister Ichiro Koizumi’s Official Residence (Sishokante) signals to the country the government’s deep commitment to PV. Customers Most of the Japanese PV systems are installed on single family residences to average homeowners. These are typically a middle-aged Japanese family with a couple of children. The typical household income in Japan is 6.02 million ¥ per year [MHLW]. Most of the Japanese PV systems (about 3/4) are installed as retrofits on existing homes. Typical household electricity consumption in Japan is 290.5 kWh/month [JAERO]. In Japan, a PV system annually generates on average about 1,050 kWh/kWp [Kaizuma].

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While the majority of PV systems are installed as retrofits on existing homes, there are also some prefabricated homes that offer PV as part of a package deal. There is no standardized specification, and manufacturers are free to partner with PV companies who offer them the best deals. More and more of the prefabricated homes will offer a PV option in the future. Close cooperation between government, industry, and academia has made Japan the leading producer of solar cells in the world with over 40 percent of global production (the share of production the U.S. held a decade ago). The installed capacity of PV installations in Japan at the end of 2004 was 1,132 MW, of which 272 MW was installed that year. Of the installed systems, 92.3 percent are for grid-connected distributed applications such as residences and public buildings. Total PV production in Japan for 2004 was 601.5 MW. Sharp was the largest PV module producer, with 324 MW of production in 2004 - an increase of 64 percent from 2003 [Ikki]. 1,200

1,132.0 87.2

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Fig. 2. Japan PV installations over the past decade (RTS and NEDO).

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Fig. 3. Japanese PV installations in FY2004 [RTS & NEDO]. Japan sets the global standard for residential PV installation programs in terms of size and cost. The country currently installs about 50-60,000 PV homes per year in cooperation between with the large cell manufacturers and the home builders. Japan has more PV homes than any country with a total number of residential PV systems that will surpass a quarter million in 2005. Given the large PV manufacturing base in Japan, PV systems are more inexpensive in Japan than the rest of the world. The balance of systems (BOS) is also cheaper due to simplified electrical code requirements. Last year the average residential PV system cost 670¥ (US$6.09/Wp) and is expected to come down to 650¥ by the end of this year [Kaizuma]. Table 1. Japanese Systems Prices 2004 (Yen per Wp) [RTS] Installed PV System (¥/Wp) Average Residential System ~670 (US$6.09) Solar Array ~440 (US$4.00) BOS ~160 (US$1.45) Installation ~70 (US$0.64) GOVERNMENT SUPPORT The Japanese government supports PV development throughout, from the Prime Minister and Parliament down to the different implementing agencies. The Ministry of Economy, Trade and Industry (METI) began a subsidy program for residential PV systems in 1994. At first, the subsidy covered 50 percent of the cost. The subsidy was for PV modules, BOS, and installation. The program was open to participants from residential homes, housing complexes, and collective applications. In 1997, METI grew the program to encourage mass production of PV systems. After achieving their price goals, the Japanese government rolled back the subsidy program in 2003 with plans to phase them out by 2005 [Sakata].

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Budgets and subsidies are shrinking for residential PV installations as the government has now created a largely self-sustaining market. METI’s 2005 new energy promotion budget includes funding for PV, mostly at the regional level, with measures including community support, creation of small and medium-sized businesses, and regional activities for prevention of global warming. However, this budget, which had grown from under ¥30 million in 2001 to almost ¥70 million in 2004, has also fallen by over 30 percent in 2005. The Japanese government is now shifting focus and subsidies to commercial and utility scale systems. It is anticipated that government budgets and subsidies will be growing for this sector (e.g., water plants for backup power) [RTS]. 4,500

Average price of PV System (Yen/W)

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There are also municipality and city support programs. For instance, in Ohta city (outside of the NEDO clustered PV program), over 150 homes have received a subsidy from throughout the city to install PV systems. They receive a ¥$100,000/kW coupon to install a PV system, with a maximum allotment of ¥$400,000 [Inokoshi]. The largest portion of government funding goes to PV systems deployment and field testing. While support for residential PV installations is dropping, support is ratcheting up for PV installations at public and industrial facilities [Sakata]. This trend is expected to continue.

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Table 2. PV Field Test Projects for Public and Industrial Facilities [NEDO] Budget: Unit: Billion Yen Item FY FY FY FY 2001 2002 2003 2004 Field Test Project on new PV 3.50 5.03 Technology (2003-) PV field test Program for 1.99 4.50 0.26 0.14 Industrial Use (1998-) PV field test Program for 0.07 Public Facilities (92-01)

FY 2005 9.23 0.11 -

Fig. 5. Project designer Mr. Ohashi and Osaka Waterworks Kunijima Treatment Plant with a 150 kWp PV plant (Kyocera), one of a dozen such PV water plants in Japan. Utilities The electrical sector in Japan is in the final stages of deregulation. There are five electric utilities in Japan, all of which are investor owned. Generation, transmission, and distribution are vertically integrated. There are also some independent power producers that generate electricity. The electric generation industry is regulated by the Agency for Natural Resources and Energy (ANRE) of METI. 7

The distribution network for electricity in Japan is single-phase, 3-line 100/200 V a.c. The western part of the country uses 60 Hz (e.g, Osaka), while eastern Japan uses 50 Hz power (e.g., Tokyo). This fact also is an advantage for the Japanese inverter industry, as it designs inverters for both 50 and 60 Hz for their own market, thus having ready made products for the European and U.S. markets. Typical metering arrangements and tariff structures for electricity consumers are 30 minute interval readings. Time of use tariff is available. Retail electricity prices in Japan are as follows [TEPCO]: Household: 22.43 ¥/kWh Commercial: 12.24 ¥/kWh (summer) & 10.93 ¥/kWh (rest of year) Industry: 9.43 ¥/kWh (summer) & 8.56 ¥/kWh (rest of year) Utilities are responsible for their side of the grid. The PV installation is done by the PV and contractors industry. There are some big utility PV installations, but nearly ninety percent of PV is installed on residences. Normally there is a separate meter to monitor PV system performance.

Fig. 6. PV system grid intertie (note 2 meters) in Ohta City. Inverter and battery bank are housed in the large boxes on the right. FINANCING METI’s original subsidy program for residential in 1994 covered 50 percent of PV system costs. The subsidy was for PV modules, BOS, and installation. The program was open to participants

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from residential homes, housing complexes, and collective applications. In 1997, METI grew the program to encourage mass production of PV systems. After achieving their price goals, the Japanese government greatly reduced the subsidy program in 2003. The program is to be phased out at the end of 2005, although industry is lobbying the government to continue the program (which had also been previously scheduled to end before and was successfully lobbied by industry to extend it). Table 3. Residential PV system Dissemination Program Subsidies [NEDO] Budget: Unit: Billion Yen Item FY FY FY FY 2001 2002 2003 2004 Residential PV system 23.51 23.20 10.50 5.25 Dissemination Program

FY 2005 2.60

There are no special provisions in the financial sector for PV systems. The typical mortgage interest rate in Japan varies from about 2.5 to 3.0 percent. There are no special energy mortgages for PV installations. On new homes, the PV system is just part of the overall home price. On a new home, PV can be incorporated as part of the overall home mortgage. Marketing PV plays an important role within Japan’s overall energy strategy. The government has raised public awareness on climate and energy matters, and on how solar PV can bring global and personal benefits. There are ongoing government publicity campaigns, from both national and local government, on the benefits of PV related to environmental issues. PV technology is promoted through a range of media from newspaper to television. The Japanese PV industry conducts marketing activities for their own PV products. In Japan, since solar energy is a popular idea with the public, industry sales need to differentiate themselves from their competitors rather than selling the public on the solar system concept. Most systems sold go to homeowners who have a profound understanding of the ecological impacts of their purchase and are not as concerned about the decades' long payback for the system.

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Cumulative Residential Installations: 223,932 homes (828.1 MW)

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Fig. 7. Growth of Japanese residential PV system installations 1994-2004. There are PV commercials aired on television. One classic commercial in Japan currently run by Kyocera shows a young Japanese woman homeowner proudly viewing the energy production of her Kyocera PV system with the Kyocera graphical display meter inside her home. Then there is a clap of thunder and rain, and she is sad that her system is not producing power. The shot cuts away to the PV system and explanation. But soon, the sun comes out again and the birds are singing and the PV system owner is once again pleased about producing energy. Likewise Sharp has a commercial promoting the ecological aspects of solar energy and exhorts viewers to “Change all the roofs in Japan into PV plants.” The Japanese PV industry has also made it easy for consumers to understand the performance of their PV systems, which also figures prominently into advertisements. Instrumentation on installations comes from industry. They have their own simple-to-read graphical meters (e.g., Kyocera) so that homeowners can easily follow their system's performance.

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Fig. 8. Consumer friendly Kyocera residential PV meter display PV SYSTEM CHARACTERISTICS Overall Japanese PV systems are professionally installed and exhibit excellent workmanship with dedication to detail. The image of PV in Japan is a positive one and that the technology works. Overall, the industry is not highly regulated and the Japanese companies are entrusted to design and install PV systems. There are some general guidelines for grid-tied installations as recommended by JET; while these are not law, they are generally followed by the industry. Japanese PV Electrical Code The Japanese Industrial Standards (JIS) specifies the standards used for industrial activities in Japan. The standardization process is coordinated by the Japanese Industrial Standards Committee (JISC) and published by the Japanese Standards Association (JSA). The objective of the JSA is "to educate the public regarding the standardization and unification of industrial standards, and thereby to contribute to the improvement of technology and the enhancement of production efficiency." The Japanese have a well established electric code developed after 1945, known as the "Technical Standard for Electric Facilities." Technical Standard for Electric Facilities The equivalent to the NEC Article 690 in Japan is Section 50 in the Japanese code. It is essentially a simple one-page checklist. The Japanese code is not prescriptive, but rather more of a handbook. Individual manufacturers are responsible for following the code on their installations. In Japan, the work ethic is such that companies take pride in their work and want to do quality installations. There is no requirement in the code to use listed modules, inverters, etc.; however, the manufacturers take pride in getting their equipment listed, and installers will want to use listed equipment. The main points of the Japanese electric code related to PV installations are pretty simple and straightforward, and all that is stated is this: •

Charging parts should not be exposed.



PV modules should have a disconnect located near the array.



Overcurrent protection should be installed for PV modules.

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The minimum size wire used for module installations should be 1.6 mm2 and follow existing wiring codes.



Interior installations should follow all other codes (Sections 177, 178, 180, 187, 189).



Outside installations should follow all other wiring codes (Sections 177, 178, 180, 188, 189, 211).



Wires should be connected using terminal connectors and the connections should have appropriate strain relief.

Japanese PV systems are installed in compliance with the Japanese electrical code. In eastern Japan, systems use a European standard of 50 Hz ac, while in western Japan they use a U.S. standard of 60 Hz. Japanese electrical codes are somewhat similar to European electrical codes, with PV systems ungrounded on the dc side and grounded on the ac side. A chassis ground is always used (ac and dc sides). Design PV companies and electrical contractors design PV systems in Japan. Utilities sometimes may get involved in the design a few of a large scale system, but typically not for the smaller residential systems. Residential PV systems generally range from about 3-4 kWp and average about 3.6 kWp [Kaizuma]. PV arrays are often mounted directly onto reinforced corrugated metal roofs (no roof penetrations). Most roofs in Japan are metal or a traditional style ceramic for high-end roofs. There is a great deal of concern in Japan that PV systems withstand typhoon (hurricane) force winds which are common during the late summer months. Often commercial PV installations in Japan are not optimally tilted for solar energy production but are titled in favor of better wind survivability. System profiles are installed low to the roof to reduce wind loading. Local codes typically call for PV systems to withstand winds of 36 m/sec in Tokyo, 46 m/sec in Okinawa, and even 60 m/sec in some places such a Kanazawa City [Nitta].

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Fig. 9. Underside of typical Japanese PV array clamp mounting on metal corrugated roof (no roof penetration) designed to withstand typhoon force winds. One unique aspect for some Japanese PV installations is that many systems are installed with PV arrays facing south, east, and west on the same roof. This is due to the limited roof space of smaller Japanese homes. The west and eat arrays typically produce about 80 percent of the energy as a south facing array. Some inverters (e.g., Sharp) are designed to max power point track three different sub-arrays independently for this reason.

Fig. 10. Japanese homes with PV sub-arrays facing east, south, and west in Ohta City. Japanese PV systems are not grounded on the dc side (although they all do have a chassis ground). Only the a.c. side is grounded. Operating voltage is 200/100V a.c. The distribution network for electricity in Japan is single phase 100/200 V a.c. The western part of the country uses 60 Hz (e.g, Osaka), while eastern Japan uses 50 Hz power (e.g., Tokyo). Modules Crystalline PV modules are by far the most popular in Japan, representing over 80 percent of PV modules produced and installed in the country. Modules normally carry a guarantee on

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performance from 10 to 25 years, depending on the manufacturer (those active in U.S. markets will have a superior warranty). Thin film modules are slowly gaining in popularity, but still greatly lag sales of crystalline modules. Cadmium telluride (CdTe) modules will not be found in Japan due to the society’s disdain for using toxic materials. A lot of thought has been made in Japan on how to recycle a PV module, thus toxic materials are quickly eliminated from consideration of use in PV modules. Demand for solar grade silicon worldwide almost tripled from 1998 through 2003, while output did not even double in this period [Rentzing]. Thus, PV system prices have not dropped significantly in Japan in the past four years (only 13 percent). They are not likely to drop significantly again until 2007 when the solar grade silicon shortage is expected to ease as key producers like Hemlock and Tokuyama significantly increase production. PV market in Japan - Production volume by cell technology 700

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Fig. 11. Total Japanese PV cell production by cell type since 1986 though 2004 [RTS] Inverters In Japan, there are 24 residential PV inverter manufacturers. Most Japanese inverters do not use transformers. There are 106 listed residential PV inverters in Japan. Inverters are single-phase and 3-wire (100 and 200V). This has made it difficult for them to get UL listing for U.S. markets. Inverter warranties also apply that vary by manufacturer (typically 1-3 years). Several Japanese PV producers also make their own inverters, such as Kyocera, Sanyo, and Sharp. Sanyo has sold over 200,000 inverters for instance [Inoue]. Sharp and Daihen are

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developing inverters jointly for large-scale PV systems installed by commercial users and electric utilities. Daihen is responsible for manufacturing the solar inverters, while Sharp focuses on PV modules targeting electric utilities. In the future as the industry prepares for UL listing, CE, etc., it can be expected that Japanese inverters are going to become as prevalent as Japanese PV modules around the globe. Some of the major inverter manufactures include Sharp/Daihen, Omron, Toshiba, Mitsubishi, Sanyo, GS, Matsushita, and Kyocera. Inverters in Japan are considered to be a mature technology. NEDO is not focusing any research funding on inverter development. They are looking at how large clusters of inverters work together and how to improve performance, such as the Ohta City project. At the large Ohta City clustered PV project, Kadenko has reported only a very few inverter failures from 300 installed systems [Hasegawa]. Overall, the Japanese inverter industry is mature.

Fig. 12. Four kW Omron inverter on AIST PV parking structure. Labor PV installations in Japan exhibit excellent workmanship and are done by certified electricians. Unlike in the U.S., there are no independent certified installers (e.g., no NABCEP equivalent). Industry is responsible for training their own installers. Some module manufacturers, like Kyocera, will also install PV systems, while others rely on electrical contractors. On new homes, often the same electricians that install the home's wiring system also install the PV system. Overall installation costs for PV systems in Japan are generally less than the U.S. as systems have simpler BOS requirements and more streamlined installation procedures (e.g., no roof penetrations). Systems can be installed efficiently, in only a couple of days for 3-4 kWp.

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Electrical crews generally consist of 2-3 electricians/assistants. PV installations are normally completed within 2-3 days. No on-site QA records are maintained, and it is up to the installer to do a good job. If there is a failure, the installer will be held responsible. Generally, in Japanese culture, the installer and also manufacturers will want to fix any problems with their products. It is a matter of cultural honor for them to have satisfied customers.

Fig. 13. Excellent workmanship is exemplified in this PV system breaker box with monitoring transducers at Ohta City clustered systems project. GUARANTEES Japanese PV systems and components are warranted against defects in product or workmanship. A normal PV system installation is warranted for 3 years. Of course, there are additional module warranties that vary by manufacturer (10-25 years). Some in the industry believe that a 10 year module warranty is sufficient (e.g., a car only has a 3 year warranty but everyone knows it will last longer). 16

There are no requirements for using listed equipment in Japan. It is strictly voluntary to have listed modules and inverters. However, most manufacturers will seek a voluntary listing from JET to be more competitive. Japanese installers are left on their own to do the right job (this is akin to how the Japanese automobile industry operates). It is a matter of cultural and professional pride for Japanese industry to install quality PV systems.

Fig. 14. Kadenko technicians troubleshooting PV system at Ohta City residence. PV MANUFACTURING IN JAPAN Japan leads the world in PV manufacturing and innovation. Residential system needs have helped promote higher cell efficiencies and smaller sizes. Larger commercial systems have led to innovation in PV for building integration that requires flexible, lightweight, light-transmitting or bifacial products for facades and large area installations. A number of office buildings now have see-through PV on their south facing windows. There are some prefab homes using PV, but only 25 percent of installed residential systems are on new construction. There is continuing research and development at expanding the use of PV on pre-fab construction. The factory will offer a PV systems packages for delivery. Most assembly is still done in the field.

17

Fig. 15. Building integrated see-through PV modules (Sanyo) at the Ohta City office complex. Japan is also shifting home construction towards a “mass customization” approach. A future homeowner is given a wide menu of standardized options to customize their prefab home design (e.g., they may have a dozen different stairway designs to pick from for a house, windows, etc.). Customized modifications can be significant on homes and gets the homeowner involved with their home design. The manufacturers do offer standardized systems, but these vary from manufacturer to manufacturer. Systems manufacturers do buy components from different companies. Note that a number of the PV manufacturers also make their own inverters (e.g., Sanyo, Kyocera) and also install their own systems at times. JAPANESE PV INDUSTRY The Japanese industry forms the backbone of the global PV industry. The national research and development program was started in 1974, with equal emphasis on both parts. The government research program has been tightly coordinated with Japanese industry and academia. Today there are 13 major PV module manufacturers in Japan. The world’s leading PV companies, such as Sharp, Sanyo, Kyocera, Mitsubishi, and Kaneka are all Japanese. Japanese industry continues to strive for cost reductions in PV manufacturing, but also while maintaining a healthy profit,

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especially for those companies well established in the sector. Residential PV installations are driving the domestic market in Japan.

Industrial and Bussiness facilities, 13,765 kW 5.1%

Public Facilities, 8,718 kW 3.2%

Others, 27 kW 0.0%

Consumer use, 1,983 kW 0.7% Small PV system, 5,365 kW 2.0%

Domestic Shipments 268.8 MW (2004)

Residential, 238,926 KW 88.9 %

Fig. 16. Japanese installations by sector type in 2004, dominated by residential [OITDA] One of the main concerns of Japanese PV module manufacturers has been expansion of their production capacity to meet growing demand. PV growth in Japan has also nurtured peripheral industries, such as silicon feedstock manufacturing, ingot and wafer production, inverters, and reinforced aluminum frames. Sharp is the number one PV manufacturer, followed by Sanyo and Kyocera. The table below shows the main cell manufacturers in Japan. In addition, Kubota (bought out by MSK), Matsushita, and Alapea also make PV modules in Japan. Casio also produces a-Si for consumer products (watches, calculators). Japanese production volume of PV modules has increased substantially each year. Japan overtook the US in terms of manufacturing back in 1999 and their current market share of overall worldwide PV production is over 40 percent [Ikki].

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Table 4. Growth of Japanese PV Manufacturing since 2000 [RTS] Manufacturer

Production Capacity in Japan (MW/yr) FY FY FY FY FY FY 2005 Plans 2000 2001 2002 2003 2004

No. of domestic mfg. sites Cell Module

Overseas manufacturing Sites

Sharp

54

94

200

248

315 – 400

500 (2005)

1

3

40 MW/yr (US) 40 MW/yr (UK)

Kyocera

72

72

72

100

150

240

1

1

Sanyo Electric

23

31

35

68

160

3

4

Mitsubishi Electric

15

25

35

50

90

1

2

Strengthening export to European market

Kaneka

20

20

20

20

20

250 (2007) 1,000 (2010) 135 (2005) 230 (2006) ~ 50

30 MW/yr (China) 12 MW/yr (Mexico) 12 MW/yr (Czech, 2005) 10 MW/yr (Mexico) 50 MW/yr (Hungary, 2005)

1

1

Mitsubishi Heavy Indus.

-

pilot

10

10

10

25 (~2006)

1

1

(Export to Europe & Southeast Asia) (Export to Europe)

MSK

30

30

30

100

180

planning

-

2

(Export to Europe)

Hitachi

-

-

-

6-8

6-8

10

1

1

-

Honda Motor

-

-

-

2.8

2.8

planning

1

1

-

Fuji Electric

-

-

-

-

3

planning

1

1

-

FUJI ELECTRIC Since 1978, Fuji has been one of the oldest Japanese PV R&D companies in the development of solar cells on glass substrates. In 2004, Fuji Electric Systems entered the PV market with an amorphous silicon PV module designed for rooftop installations. The modules use a steel-plate substrate and sells this product for large metal roof buildings. In 2005, the company began commercial production of amorphous silicon PV on plastic substrates (~3 mWp annual production at present) [Ikki]. For more information on Fuji Electric solar products, see their web site: http://www.fujielectric.co.jp/eng/news/04100101/main.html KANEKA The Kaneka solar division is based in Osaka, and the company is the largest thin film PV producer in Japan. Kaneka was founded in 1949 as a chemical company. They began PV research in 1980 and have had commercial production for the past six years, at 20 MW and 20

increasing to 50 MW by the end of 2005. They also produce hybrid PV cells (a-Si and x-Si). Kaneka is also producing see-through PV cells that are installed by Taiyokogyo. Recently, Kaneka modules were installed on the largest a-Si see-through PV installation in the world at Kanazawa City rail station with 100 kWp. These modules were installed at a 5° tilt on concrete block with no roof penetration and are designed to meet 60 m/sec typhoon winds as required by local code. Kaneka PV modules are UL listed and have about a four percent conversion efficiency [Nitta]. Kaneka has also been working with building designers interested in using roof-top greening as a means to reduce cooling loads. Kaneka believes that this is also an important niche for PV on large office buildings and has conducted research on the benefits of rooftop PV to reduce building cooling loads [Nitta].

Fig. 17. Kaneka a-Si PV modules under test at AIST. Don Osborne of Spectrum Solar is their key U.S. collaborator, and MSK is a partner with them in the U.S. MSK uses Kaneka cells for their module assembly. Kaneka has installed about 1 MW of solar in the U.S. to date, with their largest installation near Sacramento, California, at 60 kWp. They are working on a UL listing for a roof integrated system similar to those they have installed in Japan [Ryuzoji]. Kaneka is also interested in the off-grid markets in Thailand, Malaysia, and the African continent. They make low voltage PV modules for this market, currently at only about 100 kWp/year. Kaneka is also very interested in the Mexico PV market and potential for manufacturing [Ryuzoji]. More can be found on Kaneka solar at http://www.pv.kaneka.co.cp. KYOCERA Kyocera is the second largest PV module producer in the world with 105 MWp of production in 2004. The company has been involved with PV development since the very early days (1975).

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Kyocera sells two types of systems for the Japanese market, the “Samurai” for retrofits and the “Heyban” for new homes. The Samurai roof system consists of a frameless PV module. Kyocera launched the Samurai product in the U.S. market in 2004 [Miyazaki].

Fig. 18. Kyocera’s Samurai PV system marketing campaign. The Yohkaichi factory in Japan will produce about 240 MWp of PV cells in 2005. Kyocera Corporation began assembling solar panels in Mexico and Europe in 2004 (about 10 MW each plant). Kyocera also opened a Chinese solar module assembly plant in China with 20 Megawatts of production [Ozaki]. Kyocera utilizes its d.Blue manufacturing process for higher power PV modules. This process creates a microscopic texture on the cell's multicrystalline silicon surface, reducing reflectance and maximizing the sunlight the cell can absorb. The company offers a 25-year output warranty and has a UL listing, as well as approvals from the California Energy Commission for its rebate program [Miyazaki]. For more on information on Kyocera Japan, see their web site: http://www.kyocera.co.jp/solar 22

Fig. 19. Kyocera corporate headquarters in Kyoto with BIPV on the south wall (left). MITSUBISHI There are actually two Mitsubishi companies competing with each other for PV production. Mitsubishi Heavy Industries produces amorphous PV modules (~10 Mwp last year and increasing to 25 Mwp by 2006). Mitsubishi Electric Corporation is the larger of the two and produces crystalline PV modules, totaling about 90 MWp of PV modules and cells in 2004 at the Nakatsugawa (Iida factory, Nagano Prefecture) and Kyoto works (Kyoto Prefecture) and expects to produce 135 MWp in 2005. Future plans are to increase production to 230 MW by 2006. The Kagawa Prefecture had Mitsubishi Electric install an 80 kWp PV power plant at the Ayagawa Water Purification Plant (634,000 Yen) in 2004. In China, Mitsubishi Electric is demonstrating hybrid village scale PV systems with a diesel generator back-up and battery bank. For more information on Mitsubishi solar, see their web site: http://global.mitsubishielectric.com/bu/solar/index.html

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Fig. 20. Mitsubishi Electric PV modules installed in Ohta City. SHARP Sharp Corporation is the largest and fastest growing PV cell manufacturer in the world and produces both mono-crystalline, poly-crystalline, and more recently amorphous PV modules. The company is nearly three times the size of its closest competitor with annual production of about 315 MWp in 2004 with plans to expand production to 500 MWp by the end of 2005. Sharp has benefited greatly by developing its product for the Japanese PV market. The company production has grown nearly six-fold since 2000. More recently, Sharp has been branching out of Japan in the last five years and built their first plant outside Japan in Memphis, Tennessee, with an annual assembly capacity of 20 MWp. Sharp has also begun developing its first thin-film modules in 2005 [Kaizuma]. Sharp also introduced modules for the off-grid developing world markets in 2003, with a production of 25,000 modules per month based on 80 Wp modules. The focus is on Asia, the Middle East, and Africa with turn-key small solar home systems configured for dc and ac output for off-grid households [Kaizuma]. More information on Sharp solar can be found at http://www.sharp-world.com/solar. SANYO Sanyo is one of the oldest PV companies in Japan and began developing amorphous silicon PV modules starting back in 1975. They have been rapidly growing their PV production capabilities. Sanyo Electric has about 60 Megawatts of production based in Osaka, Kaizuka City using HIT (Heterojunction with Intrinsic Thin layer - a hybrid amorphous silicon, monocrystalline silicon cell) PV modules, with cell commercial production efficiencies of 19.5 percent (21.6 percent in the lab). The Sanyo cell uses a thinner wafer than most crystalline cells (only 200 um thick) [Furukawa].

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Fig. 21. Sanyo corporate headquarters in Tokyo with BIPV on the south, east and west sides of this office complex. Sanyo is increasing PV production by 50 percent in 2005. Sanyo’s principal PV cell production factories are Shimae Sanyo a 50 MWp and Nishikuohama at 103 MWp capacity. The company also began 10 MWp of production of B series HIT PV modules at Sanyo Energy Monterrey, Mexico, plant in 2003 (SEC Sanyo Mexico) for the U.S. market. Sanyo North America works closely with PowerLight. This year they are opening a 50 MWp production plant in Hungary to help serve the European market. They are looking at opening additional production in Spain [Furukawa]. Sanyo PV modules in Japan go to about 10 percent new homes and 90 percent retrofit. They also sell grid-tied inverters and have sold over 200,000 transformerless inverters to date. Sanyo estimates that system installation runs about 10 percent of the overall PV system installed costs in Japan [Furukawa]. For more information on Sanyo, see http://www.sanyo.co.jp and http://www.solar-ark.com.

25

PV Market in Japan - Shipment Volume of PV Cell/module 700

Production Volume (MW)

600

500

400

300

Manufacturer Sharp Kyocera Mitsubishi Electric (MELOC) Sanyo Electric Kaneka Mitsubishi Heavy Ind. (MHI) Matsushita Ecology Systems Total

Comparison of 2003 and 2004 Increase Growth (%) (MW 126.09 63.7 33.00 45.8 35.00 87.5 30.00 85.7 6.5 48.1 6.0 150 1.00 66.7 237.59 65.3

Total: 601.5 MW

Sharp: 324 MW

200

Kyocera: 105.00 MW Mitsubishi Electric: 75 MW Sanyo Electric: 65 MW Kaneka: 20 MW Mitsubishi Heavy Ind: 10 MW Matsushita: 2.5 MW

100

0 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Year

Fig. 22. Growth of key Japanese PV module producers from 1986 - 2004. SOLAR RESEARCH AND DEVELOPMENT ORGANIZATIONS Japan’s current five-year plan for technical R&D, conducted by NEDO and its partners, began in 2001 and is wrapping up in 2005. It has concentrated on four areas—advanced cell technologies, development of PV systems for mass deployment, innovative PV technology, and development of advanced manufacturing technology. Advanced cell technology R&D has focused on developing lower-cost options to generate electricity from PV below current electricity prices. Advanced manufacturing technology is concentrating on ways of achieving manufacturing costs of ¥250/Wp through mass production of monocrystalline silicon substrate, as well as low-cost silicon feedstock and amorphous silicon on plastic film. A new five-year plan is now under development from 2006 until 2010, which will continue to stress deployment and also thin-film technologies [Sakata]. New Energy and Industrial Technology Development Organization (NEDO) NEDO is Japan's largest public R&D management organization for promoting the development of advanced industrial, environmental, new energy and energy conservation technologies. They are under the auspices of METI (Ministry of Economy, Trade and Industry). NEDO was established by the Japanese government in 1980 to develop new oil-alternative energy technologies. Eight years later, in 1988, NEDO's activities were expanded to include industrial technology research and development, and in 1990, environmental technology research and development. Activities to promote new energy and energy conservation technology were subsequently added in 1993. Following its reorganization as an incorporated administrative agency in October 2003, NEDO is now also responsible for R&D project planning and formation, project management and post-project technology evaluation functions. NEDO has

26

rotating membership from industry, the new NEDO director for solar (June) is Dr. Sakata from AIST. In 2005, Japanese government subsidy support for PV installations began to shift appreciably from residential to public sector and industrial systems. PV budgets have increased for development of new technology for PV power generation, as well as international co-operation and demonstration projects for grid-connected PV systems, especially for Asian developing countries. The budget for field test projects for advanced PV power generation technology is nearly half of the 2005 budget request. Japanese government assistance for PV development is shifting from R&D to field testing [Sakata]. NEDO’s budget for PV development in 2005 is ¥25 billion (~US$227 million) Field testing: ¥$9 billion (some hardware) Basic R&D: ¥$5 billion (40% to industry, rest to R&D outfits and 46 university labs) Demo/deployment: ¥$11 billion (mostly hardware) NEDO will focus on deployment through 2010, with R&D focus on a-Si and CIS. No research is conducted in Japan on CdTe modules due to sensitive national concerns related to cadmium contamination (cadmium waste problems in Japan’s history caused many deaths). Inverters in Japan are considered to be a mature technology. NEDO is not focusing any research funding on inverters [Sakata]. At the large Ohta City clustered PV project, Kadenko reported a few inverter failures, but overall there have been few system problems. NEDO with JET and AIST is studying how many clustered inverters (>300 homes) affect the quality of the local grid. As multiple small inverters go on the grid, the overall voltage tends to rise and then is held level, causing some loss of energy. They are devising ways to store the energy for later use to capture this lost power, so experimenting with battery energy storage (1/3 of the PV homes in Ohta have batteries presently). See http://www.nedo.go.jp for more information on NEDO.

27

Table 5. National Budget of PV Power Generation [NEDO] Unit: Billion Yen Item

FY 2001 FY 2002 FY 2003 FY 2004 FY 2005

Residential PV system Dissemination Program

23.51

23.20

10.50

5.25

2.60

Field Test Project on New PV Power Gen Technology PV Field Test Program for Industrial Use PV Field Test Program for Public Facilities R&D pf PV Power technology Advanced Manufacturing Technology PV system technology for mass dissemination PV system technology for dissemination acceleration PV Power generation development

1.99 0.07 5.05 1.31 -

4.50 7.30

3.50 0.26 5.09

5.03 0.14 4.60

9.23 0.11 2.84

-

1.26 1.07 -

1.14 0.80 -

0.71 0.55

International Cooperative Demo of PV Systems

0.28

0.80

1.90

2.11

-

International Demo Project for Stabilized Grid

-

-

-

-

0.84

Demo of Grid-Interconnect of Clustered PV Systems

-

0.10

2.37

5.94

1.25

35.90

25.95

25.00

18.13

Total 32.31

National Institute of Advanced Industrial Science and Technology (AIST) This is the national research center with over 2,500 staff, 23 of which are in the solar division under the Energy Technology Research Institute (ETRI). The solar division is mostly government funded, with some funding from industry as well. They do a variety of cell and systems research and have over 100 patents. They are the key laboratory for calibrating solar measuring equipment in Japan as well, for other labs such as JET and industry. AIST is equivalent to a U.S. national laboratory.

28

Fig. 23. AIST PV module test lab. AIST calibrates test equipment for JET. AIST has over 800 kWp of installed PV systems and maintains a benchmarking program with 100 kWp of smaller arrays with every kind of PV module and inverter made in Japan. They work with Shoa-Shell on CIS and also do work on organic solar cells. Also work on see-through a-Si. They do no work on CdTe [Sakuta]. AIST also monitors performance of PV systems in Japan and have extensive database information they might be willing to exchange. This will require a formal agreement between Sandia and AIST and approval from NEDO.

29

Fig. 24. AIST PV benchmarking facility, with about 100 kWp of PV installed representing all major module and inverter types produced in Japan. AIST is also active in PV deployment in less developed countries throughout southeast Asia (Mongolia, Vietnam, Laos, Cambodia, etc.). They are particularly interested in installing gridtied PV systems and just finished a 140 kWp grid-tied installation in Mongolia [Otani]. For more information on AIST, see www.aist.go.jpk and also www.pvsystem.net and www.solartown.net. Japan Electrical Safety & Environment Technology Laboratories (JET) As a METI (Ministry of Economy, Trade and Industry) designated testing body and independent and impartial certification institution with a proven track record, Japan Electrical Safety & Environment Technologies (JET) provides product certifications by use of a symbol that represents “safety and authority” to manufacturers and importers as well as to consumers. JET receives a range of requests from government agencies including requests to conduct tests on electrical products purchased in the market, to harmonize domestic standards with IEC standards, and to conduct research and development on technologies for assessing solar power electric generation systems. PV Module Certification With regard to photovoltaic generation systems, JET began registration of system interconnection devices linking PV modules installed on residential homes with electric power company systems in 1993. In addition, JET began calibration service for PV modules in April 2002 and began certification of PV modules in 2003. The JET Pvm Certification Scheme is a voluntary program operated by JET and certified to IEC 61215 and 61646. The main objectives

30

are to verify the safety and reliability of PV modules. Certificates are granted to modules after successful completion of applicable tests based on IEC module test standards. There are 13 PV module makers in Japan and JET has now tested over 500 individual modules for performance certification. They have not been testing modules for safety to date, but may begin doing so in the spring of 2006 in accordance with IEC 61730 [Suenaga]. Likewise, JET certifies inverters for PV systems. In Japan, there is no actual requirement to use JET listed inverters and modules, but most manufacturers want to participate in the JET program so that their modules are viewed as independently certified and thus will be more competitive in the marketplace [Igarashi].

Fig. 25. Sanyo inverter undergoing test certification at JET (July 2005). JET has two published guidelines on PV installations and testing: Guidelines of the Technical Requirements for Grid-Interconnection Test Procedure for Grid-Connected Protective Equipment, etc. for Photovoltaic Power Generation Systems JET also is working with NEDO and has a database on 100 monitored PV systems under the Japanese monitoring program. More information can be found on JET at www.jet.or.jp.

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Fig. 26. JET solar simulator for PV module characterization. Modules are hung on the wire mesh. Photovoltaic Power Generation Technology Research Association (PVTEC) Founded in 1990, PVTEC promotes R&D projects for reducing solar cell production cost and on advanced solar cell technology with NEDO funding. Part of PVTECs mission is to help Japan stay ahead of other countries with PV R&D. It is an industry consortium of 20 different companies, where industry staff come for 2-3 years and collaborate on research activities. Thus, engineers from Sharp, Mitsubishi, Shoa-Shell, Sanyo, etc. all collaborate together and later return to their own companies [Iwata]. PVTEC’s current research emphasis is on thin film technologies and manufacturing, including CIS. No CdTe research is being conducted. They also have large research focus on PV module recycling [Iwata]. PVTEC is very active internationally, cooperating with various foreign laboratories and organizations. They also help manage many of the IEA/PVPS activities for Japan. PVTEC also has active programs with NEDO in developing countries, focused on southeast Asia They are doing a 140 kWp grid-tied PV project in Beijing, a 140 kWp BIPV project in Thailand, and currently planning similar projects in Laos, Myanmar, and Vietnam. PVTEC is also testing PV modules outside Japan in different climate zones, such as in Australia (Perth (temperate), Alice

32

Springs (hot and dry), and Darwin (hot and humid)) [Ishimura]. More can be found on PVTEC at www.pvtec.or.jp. JAPANESE PV ROADMAP The aggressive Japanese PV Roadmap to 2030 was developed by industry and research institutes. The roadmap was developed by NEDO and chaired by the Tokyo University of Agriculture and Technology (Dr. Kurokawa) with input from JPEA, Sharp, Kaneka, Sekisui Chemical, Kajima, Nikkei Science, Tokyo Institute of Technology, Toyota Technological Institute, AIST, NEF, and PVTEC. The Japanese reviewed the U.S. Roadmap during planning and indicated that they did not want to be out of sync with the U.S. Roadmap [Sakata]. The Japanese government and industry view that the next 25 years will be a critical period for the creation of a full-scale PV market. A cumulative capacity of 83 GW of photovoltaics in Japan is seen as achievable by 2030, by which time PV could meet 50 percent of residential power needs, which is equivalent to about10 percent of Japan’s entire electricity supply [Sakata]. The PV price targets to be achieved by means of R&D, large scale deployment and export sales are ¥23/kWh by 2010, ¥14/kWh by 2020, and ¥7/kWh by 2030. Future PV cost goals were picked on making PV competitive with conventional energy and not based on any type of technology feasibility study. Thus, the goal of 23 ¥/kWh by 2010 corresponds to the current residential electric rate; 14¥/kWh by 2020 corresponds to the current commercial rate; and 7¥/kWh by 2030 corresponds to the current industrial rate (about what U.S. electric rates are today). All price goals are defined in terms of 2002 Yen [Sakata]. 2002

2007 2010

2020

Electricity Cost

~50 Yen/kWh

2030

Lees-dependent on Grid From Individual to Clustered

Grid-Connected PV with Higher Degree of Autonomy ~30 Yen/kWh

Bulk Si & Thin Film Si/ Compound

Battery Backed up

Large System Long Life BOS

~23 Yen/kWh

New Material Entering

~14 Yen/kWh Cost Reduction by Technology Generation Change

Active Grid Controls

Very Thin Cell/ Multi Junction

~7 Yen/kWh

New Material/Structure Ex; Dye-sensitized

Fig. 27. Japan’s PV roadmap and system price goals to 2030. The goal is for 4.8 GW PV installed by 2010 and 83 GW by 2030. CONCLUSIONS In Japanese society, the use of PV is seen as important and necessary from a social, cultural, and ecological perspective. Likewise, Japanese leaders and industry see PV as a revolutionary

33

technology that can make significant contributions to the electric power sector while making good business sense. A Combination of R&D support and installation subsidies support has proven an effective strategy to promote PV technology introduction. Government involvement has been important at the initial stage of technology introduction. Market subsidies help create initial markets. The Japanese PV system market will continue to benefit and expand beyond that of any other country even as government subsidies for the residential sector are greatly reduced. The leading market sector will continue to be residential installations for the rest of the decade. However, there will be greater emphasis and PV systems growth in the public, industrial, and business facilities sectors. As PV Systems spread across the world, Japan has deliberately and intelligently placed itself as the global leader to meet future PV demand. The Japanese industry model is outwardly focused towards export markets and the majority of Japanese produced PV product is exported. In particular, there is a focus on key Asian developing country markets (e.g, China, Mongolia, Vietnam), as well as European markets (Germany, Spain) and North America (U.S. and Mexico). Japanese industry has now set up overseas manufacturing operations in Europe, U.S., and Mexico. Balance of systems such as inverters are considered to be a mature technology. Japan future government R&D technology development will focus on thin-film PV technologies, excluding CdTe. However, the Japanese government’s largest budget focus will continue to be on field deployment for the commercial and utility sectors (both in-country and Asian developing country markets).

34

REFERENCES Bihn, Dan, “Japan Takes the Lead,” Solar Today, Vol. 19, No. 1, Boulder, Colorado, January/February 2005, p. 20-23. Furukawa, Isao, Kaneka, personal communication, Osaka, July 2005. Hasegawa, Shoji, Kadenko, personal communication, Ohta City, July 2005. Igarashi, Hironobu, JET Yokohoma Lab, personal communication, Tokyo, July 2005. Ikki, Osamu, “PV Activities in Japan,” RTS Corporation, Vol. 10, No. 11, November 2004. Ikki, Osamu, T. Ohigashi, I. Kaizuka, and H. Matsukawa, “Current Status and Future Prospects of PV Deployment in Japan: Beyond 1GW of PV Installed Capacity,” EUPVSEC-20, Barcelona, Spain, June 6-10, 2005. Ikki, Osamu, RTS Corporation, personal communication, Tokyo, July 2005. Inokoshi, Kazuhiko, Ohta City Environmental Division, personal communication, Ohta City, July 2005. Inoue, Hiorshi, Sanyo, personal communication, Osaka, July 2005. Ishimura, Masanori, PVTEC, personal communication, Tokyo, July 2005. Iwata, Ichiro, PVTEC, personal communication, Tokyo, July 2005. JAERO, Japan Atomic Energy Relations Organization, Tokyo 2004. JET, Guidelines of the Technical Requirements for Grid-Interconnection, Tokyo, Japan, March 10, 1998. JET, “Test Procedure for Grid-Connected Protective Equipment, etc. for Photovoltaic Power Generation Systems, Tokyo, Japan, October 2002. Jones, Jackie, “Japan’s PV Market: Growth Without Subsidy,” Renewable Energy World, March-April 2005, pp. 36 – 42. Japanese Standards Association, Technical Standard of Electric Facilities, Tokyo, 2004. Kadenko, Technical Standards for Electrical Standards, Tokyo, 2004 Kaizuma, Izumi, RTS Corporation, personal communication, Tokyo, July 2005. Kazuo, Nagashima, Ohta City Pal Town, personal communication, Ohta City, July 2005. Matsukawa, Hiroshi, RTS Corporation, personal communication, Tokyo, July 2005. Miyazaki, Yoshitaka, Kyocera, personal communication, Kyoto, July 2005. MHLW – Ministry of Health, Labor and Welfare, National Livelihood Survey, Tokyo, Japan, 2002.

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Nishikawa, Shogo, Nihon University, personal communication, Tokyo, July 2005. Nitta, Yoshiteru, Kaneka, personal communication, Osaka, July 2005. Ohashi, Yoshiyuki, Kaizuma, Izumi, RTS Corporation, personal communication, Tokyo, July 2005. Opto-electronic Industry and Technology Development Association, Tokyo, 2004 Otania, Kenji, personal communication, Tsukuba, July 2005. Ozaki, Masayoshi, Kyocera, personal communication, Kyoto, July 2005. Ryuzoji, Antonio, Kaneka, personal communication, Tokyo, July 2005. Saho, Eiichi, Kaneka, personal communication, Tokyo, July 2005. Sakata, Isao, NEDO, personal communication, Kawasaki, July 2005. Sakuta, Koichi, AIST, personal communication, Tsukuba, July 2005. Sharp, Tim, “Policy Switchback,” Renewable Energy World, March-April 2005, pp. 92 – 99. Rentzing, Sascha, “Not enough sun collector material,” New Energy: Magazine for Renewable Energy, No. 2, Osnabrück, Germany, April 2005, pp. 50-53. RTS Corporation, various communications, Tokyo, 2005. Suenaga, Shoichi, JET Yokohama Lab, personal communication, Tokyo, July 2005. TEPCO - Tokyo Electric Power Co., FY2004 Electric Utility Handbook, Tokyo, Japan, 2004. Uchida, Yasunori, JET Yokohama Lab, personal communication, Tokyo, July 2005. Ueda, Yuzuru, Tokyo University of Agriculture and Technology, personal communication, Tokyo, July 2005.

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