Companies rush to set up solar power in Japan

Companies rush to set up solar energy plants in western Japan. Japan will launch a new feed-in-tariff scheme for renewable energy, expecting to encourage both solar power and wind energy projects in the country.

In July, Japan will launch a new feed-in-tariff scheme for renewable energy, expecting to encourage both solar power and wind power projects in the country.

The new scheme was proposed by the central government aiming to reduce reliance on nuclear power after the radioactive disaster at Fukushima No.1 Nuclear Power Plant while diversifying methods of power generation.

Local press reported that a government panel proposed this week regional power utilities should purchase electricity at a rate of 42 yen (about 0.5 U.S. dollars) per kWh for solar power supplies.

The report said the proposed rate could meet earlier demands from the industry. Prior to the official start of the renewable energy incentive program, Japanese companies have accelerated setting up mega-solar projects over the past months especially in western and southern Japanese cities or towns where no major damages by the Great East Japan Earthquake in March 2011 are seen.

Among them, Japanese electronics giant Kyocera Corporation earlier this month unveiled plans to build Japan’s largest solar plant in the country’s southern city of Kagoshima. Kyocera said the new project would be jointly undertaken with heavy machinery manufacturer IHI Corporation and Mizuho Corporate Bank which will devise a financing plan for the project.

The three companies agreed to construct the 70-megawatte solar power plant, The total cost of the project is estimated at 25 billion yen (about 309 million U.S. dollars). The planned site of the solar plant is approximately 1,270,000 square meters, and construction is expected to start this July.

According to the plan, Kyocera will provide solar modules, using 290,000 panels, based on its 35 years of experience in the solar business while IHI will lease the land.

The Kagoshima solar farm will generate enough electricity to power 22,000 households while reducing greenhouse gas emissions by 25,000 tons annually. Kyocera stressed that the project would also serve as a business model to further explore chances to develop such utility-scale solar power generation that the country’s utility companies also widely research in the wake of the Fukushima nuclear accident.

"As Japan has little fossils fuel resources such as oil and gas, it is quite natural and reasonable to select renewable energy resources, particularly "solar" as the basic tool to find out other alternative choice to them." "Of course, solar power makes a better contribution to environmental protection, including the reduction of CO2 emissions," Chikako Morioka, Manager of Kyocera’ s Communication Section told Xinhua.

She also pointed out that such projects would attract many industries in local areas, both vitalizing their economy and culture through the spread of renewable energy use.

Meanwhile, Japanese mobile telecoms group Softbank also set up its project to construct the 30-megawatte solar power facility in Yonago, Tottori Prefecture in western Japan.

According to the news release, SB Energy Corporation, Softbank’ s clean energy unit and trading house Mitsui & Co. will jointly construct a plant on industrial estate with about 500,000 square meters of area. A SB Energy spokesperson said the company hopes to complete construction of the plant by the end of 2013 and the output of the plant could be enough to cover all electricity needs of about 7,500 households.

The energy firm also plans to build and operate mega-solar power plants with other partners at more than 10 locations in Japan, including major plants currently being constructed in Kyoto and Tokushima Prefectures in western Japan.

Softbank’s Chief Executive Officer Masayoshi Son expressed his satisfaction regarding the proposed purchasing rate under the new feed-in-tariff scheme, telling reporters that the price would enough fit a series of his projects and boost renewable energy businesses in Japan.

In addition, major Osaka-based private electric railway company Kintetsu Corporation also revealed its plans to build a mega-solar plant in Mie Prefecture where the railway operator widely runs its train and bus networks.

The Kintetsu solar farm will produce 20 megawatts of electricity, supplying power to about 6,000 households in the prefecture. Kintetsu spokesperson Yuri Miyamoto told Xinhua that the company hopes to begin the operation from March 2014 and the produced electricity could be sold based on the government program.

Local paper said Kintetsu, severely affected by electricity- saving measures last year, will be the first railway operator in the country to construct such a large-scale solar farm for commercial purposes.

Munenori Nomura, a professor of economics at Kwansei Gakuin University, told Xinhua that development of solar power projects, or wind farm, may promise attractive returns to those challenging companies under the new feed-in-tariff policy, but feasibility of such a renewable energy business will depend on potential capacity of the power generation in the end.

"Competing with other power generating ways such as in thermal or nuclear plants, the companies are required to maintain stability of the power generating which must supply enough amounts of electricity throughout the day and night," he said.

Before the Fukushima disaster, nuclear power generation had supplied about 30 percent of Japan’s electricity over the years while dependence on fossil fuels also caused the country’s CO2 emissions to increase.

"As long as the new program to utilize renewable resources within the national electricity grid brings a lot to the developers and people, ‘mega-solar’ can be the start of an effort to seek much safer way of energy supply in the country," Nomura added.