Why not solar “Top Sales” too?

One common argument against Shinzo Abe that I often hear is that he is off doing nuclear power station “top sales” all around the world, but instead should be selling renewables; even Friday’s News Station had the anchor making the same comment on his visit to Portugal.

Now, let’s not get bogged down on the “instead”, but ponder why he is not putting a similar effort into selling solar and wind technologies.

My opinion is that it is not really his responsibility; nuclear (like weapon sales, etc) is a government-level decision in the order of hundreds of millions, if not billions of dollars that requires head-of-state level agreement, whereas solar is on the whole smaller-scale projects, even if the sum total might exceed nuclear for a given country. Therefore, it is METI-level (Ministry of Economy, Trade and Industry) support that is needed for such sales, not Abe-level.

I’m sure I saw figures somewhere recently that said the growth of investment in solar was highest in Japan, but while searching I found Singapore investing $500 million, GE $100-200 million, and First Solar another $100 million, so now I am totally confused.

Can someone help me understand?

  1. Overall I agree. But for solar and other small-scale production to be a viable market there needs to be system-level adaptions: there has to be a legal framework to connect such small producers to the grid, and rules for how to price such sell-back. Normally there would also need to be rules to compel the large-scale producers to allow it on their nets as well, as well as financial compensation for the technical changes needed for it. That’s all really at the governmental level, I suspect.

    And from what I’ve seen (keeping in mind I’m very much not well informed about this), Japan itself rather lacks such rules at the moment, and thus keeping the number of installations rather low.

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  2. @Janne: I’m not sure what you’re talking about. Japan has a very good legal framework for small scale producers. We were looking at solar this weekend. Because the utilities are required to buy the power you produce (and at a higher rate than they are allowed to sell you power at) what you do is install a system and have it hooked 100% back into the grid. As the salesman was explaining it even a relatively small system then more than pays for itself because the difference is more than enough to cover 100% of your electric bill. Of course you have to come up with the 15-20k up front but they’re advertising this as an option for new homes so you can roll it into your mortgage and cover your utilities and part of your mortgage payment.

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  3. @El Guapo: Is that only for individuals or for small companies/medium sized producers as well? Are there any examples of companies providing electricity to the grid for resale as a business? i.e. to rival TEPCO et. al?

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  4. @Sixth Sense: I would guess, and this is just a guess, that it also includes small to medium producers. I base this off of absolutely no real knowledge other than there are 3 small solar farms on my way to work, 2 of which are on housing lots (so maybe 250-300 sqm) and one that a farmer put up that’s relatively big at around 4000 sqm (rough guess, it’s about an acre). So my guess would be that there’s some economic incentive for these people to put in small scale solar and it pays a better return than building a house on the lot or farming it.

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  5. @El Guapo: But as far as I know, TEPCO’s grid cannot be used freely by other electricity suppliers, those producing electricity can only sell it back to TEPCO. (I remember reading somewhere that they charge a 30% markup for other producers using their grid, which would make it unworkable.) The grid needs to be made into a separate entity from TEPCO to allow competition in the electricity market. There would also need to be some way of metering and billing – whose electricity are you using?

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  6. @Sixth Sense: I don’t know if deregulation of the power industry is a good idea. I’m not an energy economist just a guy who drives by several “small” producers on his way to work. I took the original question to be similar to the old cogeneration regulations in the USA (which I am more familiar with having worked in plants that produced electricity with their byproduct steam). Japan has a very similar system where Tepco is required to buy the power you generate, no idea though if there is a graduated system for larger producers.

    My memory of deregulation is limited to one place we lived years ago where you could choose your provider. They had 4-5 choices from coal to “green” (I say green because while they were trying to generate green power they bought any power they were short from the coal plants and then resold it at a much higher rate). Green was about 2x what coal was but at least you had a choice right? I know I did and went with the least expensive option.

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  7. Everyone who can read Japanese should look at the official information on METI’s website here.

    There is also a comprehensive pdf file that can be found halfway down the page.

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