Japan Solar Investing

Brian Hicks

Written By Brian Hicks

Posted May 15, 2013

Japan is quickly becoming a nation consumed by solar power and will most likely have the world’s largest solar market this year, right behind China.

solarThe move towards solar and renewable energy as a whole has become a reflection of Japan’s desire to find alternative sources of energy; the nation has been moving away from nuclear power following the earthquake and tsunami that forced all but two of Japanese nuclear reactors to shut down in 2011.

Last year, Japan amped up its clean energy capacity and added 1,394 megawatts, most of which (1,329 megawatts) was solar, according to Bloomberg. Of the 26,940 megawatts of clean energy capability Japan had by the end of 2012, about one-third of it was solar.

This was part of Japan’s incentive program that began last July to make the switch from nuclear energy and diversify its energy mix for 2013 and beyond.

Hi Ho Silver

It looks like silver will be an integral part of Japan’s push for solar power, especially as the metal has recently entered into a bear market; Japan is using this to its advantage, providing greater incentive to push for solar throughout its nation.

Most photovoltaic cells – the cells that generate electrical power by converting solar radiation or sunlight into a direct current of electricity – use silver paste, Bloomberg points out. In fact, about 90 percent of all photovoltaic cells use silver.

And of the world’s total demand for industrial silver, about 7 percent of that comes from solar panels – just to give an idea of how important silver is to solar energy.

Dowa Holdings Co. (OTC: DWMNF), Japan’s largest producer of silver, will be there every step of the way to ensure Japan has plenty of its precious metal to go around. The company has increased production by 40 percent this year to meet demand, adding to Japan’s overall increase in output by 2.4 percent.

Dowa unit Dowa Electronics Materials Co. specializes in silver powder for solar cells, and the company has expanded its overall capacity 38 percent since the nuclear disaster.

Japanese producer Toho Zinc also expanded its production capacity by 18 percent. Even the Swiss engineering company ABB Ltd. (NYSE: ABB) is getting in on the Japanese solar swing, as it has installed 1,040 photovoltaic panels on the rooftop of its ABB Bailey factory in Izunokuni City.

This new addition to the facility will serve as an example of the changes Japan will instill throughout its nation, supplying half of the peak electricity demand of the factory.

And on the island of Hokkaido, where land is inexpensive, Japan’s Ministry of Economy, Trade and Industry will send about 20 billion yen ($204 million) to install a large storage battery system with a storage capacity of 60 megawatt hours, according to Bloomberg, which will help to stabilize the power of the entire island.


Nuclear Japan

All of the recent activity towards solar power is a clear push away from nuclear energy. And much like the rest of the world, Japan clearly sees that the future is in renewable energy. Of all the world leaders, none are more accepting of the switch, especially after the catastrophe Japan suffered through in 2011.

After 2011, Japan planned to totally eliminate nuclear power by 2030. But a specific date never was set, so it remains unclear whether Japan still feels as strongly. Still, one certainty is for sure – Japan has much need to diversify its energy sources.

Solar energy seems to be that first step, and it’s happening at a feverish pace – so fast, in fact, that some believe Japan may be headed into a solar bubble as money continues to pour into new projects.

Those same folks that speculate on solar tend to look at wind as the real solution, but it’s a much longer process to complete. There are permit restrictions, transmission requirements, construction time, and hefty costs.

For now, Japan appears dead set on making solar power the number one source of energy for its citizens. In the long haul that answer may be different, but for now, anything is better than going back to nuclear.

Japan’s Solar Progress

A number of Japanese companies are involved in sectors that could contribute to the growing solar industry.

JX Holdings, Inc. (OTC: JXHLY) is mainly engaged in the petroleum business, but it has a segment in metals that offers nonferrous recycling services and industrial waste processing.

Toshiba Corp. (OTC: TOSBF) does more than just electronics. It has a segment that offers various generation and power distribution systems that will be used in Japanese solar energy.

And Global PVQ SE (OTC: QCLSY), based out of Germany, is involved in the production and sale of solar cells and their corresponding modules.

If you’re a fan of the sprint, then solar is by far your best bet – it’s quick and efficient, and it has silver on its side to give it that extra push. And that’s exactly what Japan wants right now: the right source that will get it out of the gate fast.

But that’s not the race everyone wants to run…


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