“This is gold rush territory,” said Arthur Mitchell, an attorney at White & Case in Tokyo who advises on solar projects. “Everybody and his brother and sister were kind of rushing in without any ability. The law doesn’t have any eligibility requirements. Absolutely none.”Less than a fifth of the projects the government deemed fit for subsidies are supplying power to the grid as developers struggle with problems ranging from lack of funds, grid capacity limitations, land permit issues, wait lists for Japanese brand equipment and a shortage of qualified technicians, industry watchers said.
Japan doesn’t have many good energy options at its disposal. It doesn’t have a lot of land to work with, or hydrocarbons to drill up, and its massive manufacturing sector is stymieing efforts to decrease energy intensity. The Japanese people are understandably wary of nuclear energy, and the government will have to make an iron-clad case that its reactors are safe from further natural disasters before turning plants back on. With solar’s prospects dimming, Japan has little recourse but to eat the cost and keep importing enormous amounts of LNG. Asian demand for LNG should remain high, and even rise in the coming years—America, take note.[Japanese sunset image courtesy of Shutterstock]