The Cautionary Tale of Japan’s Solar Experiment

As an island nation with next to no domestic reserves of fossil fuels, Japan has always had an energy security problem. Now, despite heavy government backing, solar power isn’t looking like the sort of solution Tokyo hoped it could be in the land of the rising sun.

From certain vantage points renewables make a lot of sense for Japan, if for no other reason than it has precious few other energy options that don’t involve relying on imports. When the country shut down its nuclear reactor fleet in the wake of the 2011 Fukushima disaster, it saw its dependence on foreign energy sources suddenly spike, and in this light one can understand why renewables like solar power might be made a priority in Tokyo.

But as Bloomberg reports, rising costs and grid stability issues are threatening to halt the rise of solar power in Japan before it really gets off the horizon:

Repeated tariff cuts and difficulty securing land and grid connections are among some of the reasons that have led to a drop in new applications to develop solar, Kawahara said. […]

Solar power-related bankruptcies are increasing, according to Teikoku Databank Ltd. The number of companies that went bust rose to 36 in 2015, from 17 in 2013 and 21 in 2014. Bankruptcies continue to accelerate, with 17 seen in just the first five months of 2016, Teikoku said.

Some question what has Japan got for all the money spent on promoting clean energy. While more solar energy is being produced, it still comprises a fraction of the nation’s power generation mix.

There’s a lot to unpack here, and none of it is pretty for solar power. Let’s start with the scale of what Tokyo is doing. Like many other nations eager to highlight their eco-conscious policymaking, Japan will like to focus on their relative progress rather than absolute numbers, highlighting the remarkable uptick in solar installations over the past five years while leaving out the fact that solar power still only made up 3.4 percent of the country’s electricity last year.

But while solar still occupies a tiny corner of Japan’s overall energy mix, its subsidized rollout is causing some very real headaches for the country’s grid operators that are struggling to deal with the influx of intermittent, distributed production. The infrastructure hasn’t been able to keep up with green-eyed solar policy ambitions, and as a result this mini “boom” is starting to stall.

And even as the Japanese government bends over backwards to prop up solar power producers incapable of competing with fossil fuels on their own merit with guaranteed above-market rates called feed-in tariffs, the majority of those promised these cushy terms haven’t begun to actually produce any power.

To recap: Japan is overpaying for an underperforming technology that their grids can’t currently accommodate, and for all of that trouble they still have hardly any solar power to show for it.

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