The 1.5 GW of PV installations translates to a growth of 270% in the first quarter of this year according to the report "The Photovoltaic Market in Japan". IHS Inc. states that this positions Japan to surpass Germany to take over as the world’s largest photovoltaics market in terms of revenue this year.
Solar demand is forecasted to double in Japan according to the report. Japan’s share of global PV system revenue will rise to 24% in 2013, up from 14% in 2012 and just 9% in 2011.
Even though China is expected to install more gigawatts than Japan, the high prices of PV systems in Japan will be the driving force behind this market becoming the revenue-generating forerunner. Solar Research Manager at IHS Inc. Sam Wilkinson says that the deceleration in Europe and the highly attractive FITs in Japan are propelling the country to become the top global solar market this year.
Global versus Japanese growth
The global market will see a lukewarm 4% growth whereas Japan is forecast to install US$20 billion worth of PV systems in 2013, up 82% from 2012’s $11 billion. Again the high system prices will be the driver.
"High system prices in Japan have always resulted in the country accounting for a significant proportion of PV system revenues," Wilkinson adds. "Now these high prices are making Japan the worlds No. 1 marketand attracting the attention of global suppliers in the process."
Hurdles along the way
It is not going to be a breeze though for companies to waltz into the Japanese market. Capitalizing on the growth opportunities is not a straightforward task for international suppliers as IHS Inc. reports. The stringent certification requirements specially for inverters make it difficult for suppliers to release products in this market. There is also a strong preference for domestic brands, particularly in the residential market which will account for nearly 40% of demand in 2013. IHS Inc. thus believes that partnerships with local suppliers would be a crucial step for manfuacturers wanting a slice of the Japanese revenue pie.
"Although international suppliers have only been able to win limited business in the residential sector, mostly by supplying local suppliers through agreements with original equipment manufacturers, the situation for larger systems is quite different," Wilkinson says. "The fastest-growing market segment is forecast to be systems larger than 1 megawatt, which is expected to grow by more than 500% in 2013. International PV module suppliers have been more successful in partnering with local project developers and have been able to ship large volumes to Japan to serve this market."
Installations in Europe on the other hand declined by 34% year-on-year in the first quarter. European demand accounted for 40% of global demand in the first quarter of this year. This is a decrease of 70% from the year before and the demand share is expected to continue tumbling throughout 2012. Wilkinson adds that the continued reductions in FITs and the introduction of antidumping tariffs have caused many of the largest suppliers to look away from Europe to new opportunities, like those present in Japan.