New residential buildings must be equipped with photovoltaic systems! The 2025 "Photovoltaic Gold Rush" is here?

What will happen to the distributed photovoltaic market this year?

 

According to multiple media reports, the Tokyo Metropolitan Assembly passed an amended ordinance requiring the installation of solar panels in all new residential buildings in Tokyo from April 2025.

 

It is understood that this amended ordinance was proposed two years ago. When the ordinance officially comes into effect in April 2025, all new residential buildings in Tokyo (including residential complexes and villas) will be required to install photovoltaic power generation systems!

 

 

This move is undoubtedly good news for Japan's photovoltaic market, meaning that after April, the installed capacity of household photovoltaic systems will see considerable growth.

 

Specific requirements are as follows:

1. Small and medium-sized new buildings (including residential buildings) with a total floor area of less than 2000 square meters:

Need to ensure heat insulation and energy-saving performance.

All new residential buildings must install photovoltaic systems.

Electric vehicle charging facilities must be installed.

2. Environmental performance description:

Developers must explain in detail to homebuyers the energy-saving performance of new buildings, photovoltaic power generation systems, and other environmental performance when selling or delivering residential buildings.

3. Building environment report:

Builders need to submit an environmental report.

The report shows whether the building meets relevant standards for energy saving, water saving, and green buildings, and the Tokyo Metropolitan Government will publicly release this report information.

In addition to the positive news for household photovoltaic systems this year, Japan's commercial and industrial rooftop photovoltaic systems have also released positive signals.

 

In addition, according to the authoritative Japanese media "Nikkei Shimbun," the Ministry of Economy, Trade and Industry (METI) plans to triple the feed-in tariff (FIT) for commercial and industrial rooftop photovoltaic systems and shorten the electricity purchase cycle by 1/4. This plan is scheduled to be implemented in fiscal year 2026 (April 1, 2026 - March 31, 2027).

 

Under Japan's current system, if companies install photovoltaic modules of a certain scale or more on factory or building rooftops, they can receive a subsidy of 12 yen per kilowatt-hour for 20 years starting in fiscal year 2024. Household users can receive a subsidy of 16 yen per kilowatt-hour for 10 years.

 

If the electricity purchase price increases threefold, the investment return period for Japan's commercial and industrial photovoltaic systems will be greatly shortened. It is estimated that the shortest period will be reduced to about 5 years, which will greatly promote the rapid development of the photovoltaic industry.

 

400GW "Photovoltaic Ambition"

 

As is well known, due to various factors such as geography and future development, Japan has always attached great importance to the development of renewable energy. Due to its location in an earthquake zone and relatively high population density, how to effectively solve the energy problem has always been one of Japan's main concerns.

 

As early as 2020, the Japanese government announced its goal of achieving carbon neutrality by 2050. Subsequently, on December 1, 2023, Japanese Prime Minister Fumio Kishida announced at the World Climate Action Summit during the 28th Conference of the Parties to the United Nations Framework Convention on Climate Change that Japan plans to reduce greenhouse gas emissions by 46% by 2030 compared to 2005 and strives to achieve a 50% reduction target. To achieve net-zero emissions, Japan will stop building new coal-fired power plants that have not adopted emission reduction measures, while ensuring the stability of energy supply.

 

Image source: PVFox

 

In January last year, under the new carbon neutrality requirements, the Japan Photovoltaic Energy Association (JPEA) updated Japan's photovoltaic development blueprint. Compared to the 2020 version, the new photovoltaic outlook increased the original target of 80% emission reduction by 2050 to carbon neutrality, increased the 2030 target installed capacity from 100GW to 125GW, and significantly increased the 2050 installed capacity from 300GW to 400GW.

 

However, there is still a gap between the current situation and the ideal. Data shows that in 2023, Japan's new photovoltaic installations were 1.1GW, with a cumulative installed capacity of 122GW, accounting for 12% of Japan's total power generation. Although the installed capacity is expected to increase slightly in 2024, the trend is towards small-scale projects with less than 50MW.

 

Therefore, Japan is also actively introducing policies. In recent years, the installation of rooftop solar power in Japan has surged, and this trend will continue in the coming years. This is partly due to the active promotion of relevant policies and partly due to the upgrading and replacement of existing rooftop solar power projects.

 

Japan's photovoltaic industry: started early, but arrived late!

 

At present, Chinese photovoltaic companies can be said to occupy half of the global photovoltaic industry, and photovoltaic products, along with lithium batteries and new energy vehicles, are known as China's new three exports.

 

However, it is worth noting that Japan is one of the earliest countries to develop photovoltaics. At the beginning of this century, Sharp Corporation held the top position in the global photovoltaic module market share, and other companies such as Kyocera, Panasonic, and Mitsubishi Electric were also among the top five.

 

Previously, the so-called oldest photovoltaic power station in China, located in Gansu Province, used photovoltaic components from Japan's Kyocera Corporation. Its initial installed capacity was 10KW, built in 1983, and has a history of more than 40 years. At that time, the domestic photovoltaic industry was still very immature and small in scale, with a national output of around 5MW. This old power station can still generate electricity continuously, although its power generation efficiency is far behind that of current components.

 

The oldest photovoltaic power station in China, located in Gansu Province

 

Although it started early, Japanese photovoltaic companies failed to maintain their glory. Around 2010, the market share of Japanese companies in the global market began to decline. In recent years, the shrinkage of Japanese photovoltaic component manufacturing companies has intensified, with companies constantly withdrawing from the field of photovoltaic component production and manufacturing, including powerful companies such as Idemitsu Kosan and Panasonic.

 

In 2023, Kyocera also closed its photovoltaic panel factory in Tianjin, China. In fact, the factory ceased production in September 2022 and switched to sourcing from Chinese manufacturers. Now, Kyocera's production base only remains at its Japanese factory (Yasu Factory in Shiga Prefecture) for the production of household photovoltaics.

 

 

In recent years, countless Japanese photovoltaic companies have gone bankrupt. These bankruptcy cases and data reflect the challenges facing Japan's photovoltaic industry due to increased market competition, policy changes, and demand fluctuations.

• 2017: 50 Japanese solar energy companies went bankrupt.
• In 2018, 95 photovoltaic-related companies went bankrupt, an 8% increase from 88 in 2017, marking the fifth consecutive year of growth and a new historical high.
• In the first half of 2019, 32 photovoltaic companies went bankrupt, with a total debt of 68.64 billion Japanese yen.
• From April to September 2021, 39 solar-related businesses went bankrupt, a 2.6% increase from the previous quarter, marking the first rise in three quarters.

 

The decline of Japan's photovoltaic industry is mainly due to several factors, including low industrial integration, insufficient management determination, and the impact of overseas photovoltaic production capacity. In addition to photovoltaics, Japan has also made significant investments in nuclear and hydrogen energy, making it naturally difficult for Japanese photovoltaic companies.

 

New Opportunities for Photovoltaic Exports

 

However, with the gradual rise of China's photovoltaic industry, more and more photovoltaic companies are entering the Japanese photovoltaic market.

 

The Nikkei conducted a "Major Commodity and Service Market Share Survey" covering 71 categories of important final products and services in global economic activity, investigating the market share of the top 5 companies. In 13 categories, Chinese companies held over 30% of the market share.

 

 

The rise of renewable energy is particularly noticeable. In the case of photovoltaic panels, in the previous survey, 4 out of the top 5 companies were Chinese, but this time they monopolized the top 5. The combined share of Chinese companies in the top 5 reached 59.3%, up 7.5 percentage points from the previous survey (51.8%).

 

In recent years, Chinese photovoltaic companies have been ubiquitous at Japanese photovoltaic exhibitions. For example, almost all the leading companies appeared at last year's Japan International Photovoltaic Exhibition - Tokyo Spring (PV EXPO 2024).

 

Among component and inverter manufacturers, Trina Solar, Longi Green Energy, JA Solar, Risen Energy, CHINT, Canadian Solar, LDK Solar, Tongwei, GCL-SI, Daqo New Energy, Huawei, Sungrow, GoodWe, Growatt, and Deye exhibited their distinctive component products.

 

In addition, some new faces were seen, such as Mingyang Smart Energy, Quanwei Technology, Xinlinfei, Runma Solar, and Zhongnengchuang, all exhibiting their latest products, mainly n-type heterojunction and TOPCon components.

 

This also reflects the fact that the enthusiasm of Chinese photovoltaic companies for overseas expansion is continuing to rise. Compared with the low profit margins and price wars in the domestic market, more and more companies are choosing to go overseas to seek higher profits.

 

From the development and trends of new energy in recent years, Japan is undoubtedly a market with great potential. Compared with the shrinkage of the domestic household market last year, the distributed photovoltaic market in Japan and East Asia will become an important battlefield for photovoltaic exports.