Japan's Solar Trends to Watch For in 2014 (page 2)

2014/01/06 21:52
Kenji Kaneko, Nikkei BP CleanTech Institute
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Thus far, the constructions of mega-solar plants have been financed by financial institutions through project finance in addition to cash-rich major companies. Not only megabanks but major local banks started to deal with project finance. But as the business risks of mega-solar projects increase, construction costs are expected to be financed more by general investors and citizens through financial schemes such as funds and the securitization of the part funded through project finance.

At the same time, in terms of technology, there will be an increasing need for meticulous "monitoring systems" to detect the risks of mega-solar plants, whose business risks are increasing, and deal with them. And their prices will be expected to decrease. Systems that monitor each string (direct-current circuit) of solar panels are increasingly being introduced. And there has already been a mega-solar plant equipped with a system that monitors each panel in Japan (See related article).

Another trend in the mega-solar business is the integration of "locally produced and consumed energy," which many local governments claim, and mega-solar plants. For example, the government of Nakanojo, Gunma Prefecture, established a local PPS (power producer and supplier), planning to sell electricity generated at a mega-solar plant run by the government. And Ohisama Energy Fund (Iida City, Nagano Prefecture) started to build mega-solar plants (See related article 2). Such activities might take place in other regions.

However, to sell electricity generated by a mega-solar plant, whose output fluctuates, it is necessary to comply with the 30-minute balancing rule. Therefore, to help a local PPS achieve the balancing of supply and demand including a mega-solar plant, new services and inter-corporate efforts are appearing.

On the other hand, in foreign countries including the US, a considerable number of mega-solar plants are being introduced in the aim of using generated electricity in house to reduce electricity cost on the premise that they will be used for 35 to 40 years. In view of the reformation of domestic power systems and the post FIT era, new business models will begin to be developed.