'Middle Solar' Projects Take Leading Role in Japan's Renewable Energy Market

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Researched by Industrial Info Resources (Sugar Land, Texas)--Recently, for the first time in 27 years, Hokuriku Electric Power Company (TYO:9505) (Toyama, Japan) (Rikuden) has opened the construction site for a hydroelectric power station to the media. The site is for the 5-megawatt (MW) Katakai Betsumata power station in Toyama prefecture. It is one of only 17 active hydroelectric power projects in Japan, according to Industrial Info's data. By contrast, there are more than 120 solar power projects and more than 80 wind power projects active in Japan that are being tracked by Industrial Info.

One reason for solar's position as most popular form of renewable energy in terms of project numbers is evident when the investment costs of wind and solar are compared with their respective project counts. Whereas solar has more than 120 projects for roughly $8 billion, wind has only two-thirds that number of projects--but a price tag surpassing $9 billion. When comparing these numbers, it is important to note that the majority of solar growth in Japan over the past year has been in a new form of solar power plant called "Middle Solar," as opposed to the leading form, "Mega Solar."

The names refer to the sizes of the power stations. Mega Solar projects are photovoltaic solar power stations of more than 1-MW capacity, usually in the 5- to 10-MW range. Middle Solar power stations are comparatively smaller, usually in the kilowatt range, installed on large rooftops and in industrial parks. The recent trend in energy strategy is to have a distributed power generation scheme on a smart grid, rather than a centralized one using traditional power stations. As a rule, Industrial Info tracks only industrial projects worth $1 million or more. With this in mind, solar power is most certainly the renewable energy source of choice for Japan.

This trend may change in the near future, though, as offshore wind energy and the associated technology become more economically viable. While offshore windfarms are still young in terms of power sources, they have been gaining momentum in recent years. On the economic side, Japan recently announced that it intends to revise the feed-in tariff for wind-generated power to distinguish between onshore and offshore wind sources, given the radical difference in construction and operation costs.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and nine international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.