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Japanese Solar Panels Efficiency requirements increased to ward off Foreign Imports

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Japan increases Solar Panel Efficiency Criteria to curtail foreign imports

Asian countries like Japan and China routinely erect non explicit barriers to imports to protect their domestic firms. This is not isolated to solar panels but extends to other industries as well. The governments and the financial institutions exhibit a strong nationalistic streak to support their companies over foreign competition. It is notoriously difficult to sell foreign brands in Japan be it mobile phones or cars. China too has protected its domestic companies through a variety of ruses like staring its own telecom standards, mandating local procurement by state owned companies, domestic content requirements for wind turbines etc.

Japan has become a magnet for solar panel producers around the world, thanks to a very generous government subsidy which has led to a huge PV Panel boom. Goldman Sachs and gambling parlor operators too have joined the fray along with a large number of conglomerates and industrial powerhouses like Mitsui, Sumitomo, Mitsubishi, Softbank etc. To protect the Japanese solar panel companies like Kyocera, Sharp, Panasonic, the Government is going to only allow import of solar panels which have a high threshold with respect to efficiency. This will lead to the elimination of a vast majority of Chinese, Korea and Taiwanese players who sell panels cheaply but have lower efficiency. Note Japanese solar panel makers make mostly high efficiency solar modules with Sanyo having one of the highest commercial efficiency solar panels in the market.

Note Japan has already curtailed imports of solar inverters through a registration requirement which has led to a boom for Japanese solar inverter companies as demand is greater than the current supply.

Japanese solar inverter manufacturers

While Japanese solar panel companies are sweating due to cheap Asian solar panel imports, the solar inverter companies in Japan are facing the happy problem of supply shortages. The reason is that the Japan requires that PV inverters be certified by Japan Electrical Safety & Environment Technology Laboratories (JET). Most of the big global solar inverter companies lack this, which means that the local companies have a massive advantage. The Japanese solar market is set to boom due to very generous subsidies set by the Government which would imply returns of around 30%. While global solar panel majors are salivating at the prospect of the huge growth, solar inverter companies face a big barrier in the form of the JET certification.

Japanese Solar Bubble

Solar Energy in Japan is seeing a huge boom in solar installations as the generous subsidy announced by the Government sees the entry of newer players each day. The growth is driven by assured returns in excess of 30% which is attracting all sorts of investors from Japan where the interest rates are as low as 1%. The Solar Bubble is growing bigger and bigger each day as the surge in solar installations refuses to stop. The Government in Japan has refused to learn from the solar bubble bursting in Spain, Italy, Czech and Bulgaria.

The bureaucrats are blind to the bubble forming in front of them. Instead Kazuhiro Ueta, the head of the five member solar panel thinks they have a late mover advantage. But they are not using the advantage by setting the solar feed in tariffs so that the rate of return is around 5-8%. Instead they have kept it at the highest rate in the world.

The setting of a crazily high Feed in Tariff of 52c/KwH, solar demand is set to increase exponentially in Japan. Note Japan is already one of the biggest markets globally and has a large solar manufacturing industry. This is ideal grounds for a subsidy led solar boom like what happened in Spain in 2008 and Czech in 2010 with pernicious results. You know there is a bubble when Gamblers and Goldman Sachs start investing massive amounts to reap the early mover advantage of the Solar Bubble.


The Japan government will reportedly hike energy efficiency standards for imported PV modules in 2013 from 250W currently to 255-260W for a module made of 60 monocrystalline silicon solar cells and from 235-240W to 245W for one made of 60 polycrystalline solar cells, according to Taiwan-based makers.

As the Japan government began to offer a feed-in tariff rate of JPY42 (US$0.53)/kWh for electricity generated by PV systems in July 2012, Japan has become a target market for Taiwan- and China-based solar cell or PV module makers because production costs in Japan are significantly higher, the sources pointed out.

The hike in energy efficiency standards for PV modules is equivalent to an increase in energy conversion rate for monocrystalline silicon solar cells from 18.2% currently to 18.8%, and that for polycrystalline ones from 16.8-17.1% to 17.4%, the sources indicated.


Sneha Shah

I am Sneha, the Editor-in-chief for the Blog. We would be glad to receive suggestions, inputs & comments on GWI from you guys to keep it going! You can contact me for consultancy/trade inquires by writing an email to

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