Solar Boom Heads to Japan Creating $9.6 Billion Market: Energy

Japan is poised to overtake Germany and Italy to become the world’s second-biggest market for solar power.

Industry Minister Yukio Edano set today a premium price for solar electricity that’s about triple what industrial users now pay for conventional power. That may spur at least $9.6 billion in new installations with 3.2 gigawatts of capacity, Bloomberg New Energy Finance forecast. The total is about equal to the output of three atomic reactors.

Japan ranked sixth worldwide by new installations last year, when it added 1.3 gigawatts of solar to bring its installed base to 5 gigawatts. Next year builders will erect roughly triple that level, or another 3.2 gigawatts to 4.7 gigawatts. A gigawatt is enough to supply about 243,000 homes in Japan.

Only China will exceed Japan in terms of solar capacity growth as it supplants Italy and Germany, which held the top two positions in 2010 and 2011.

Japan got about 1.6 percent of its energy from renewables in 2011, the smallest portion among Group of Seven countries after Canada. It trailed the U.S. and France in the G-7 in atomic power consumption.

The shift toward solar reflects concern that the cost of imported fossil fuels will rise in the coming decades.