Energy hungry markets are the new potential markets for the solar industry. China's solar market is being spurred by rising energy demand due to the rapid economic developments. Now, India and Japan (due to the March 11 earthquake in 2011) are facing the same problems of energy shortage. The industry has been optimistic about the two emerging solar markets as depedence on solar energy grows.
According to Financial Times, India is in desperate need of energy and there are still 400 million people lacking access to electricity. It stated that International Energy Agency believes India's energy consumptions are likely to double by 2035.
The Indian state of Gujarat, according to Digitimes Research's report PV 2012-Expectations for the global solar market, has set its solar installation target at 500MW by 2014 through fixed feed-in-tariffs (FITs). The Gujarat Solar Park, Asia's largest solar park, can produce as much as 214MW of energy, according to Financial Times. This park's potential output surpasses the Golmud Park in China, the report added.
To solve the problem of energy shortage, various Indian state governments have set policies to promote the use of solar PV systems. In addition to the policies, according to Digitimes Research, in 2010-2011, the state government in Gujarat signed 968.5MW of projects through the Power Purchase Agreements (PPAs).
Power shortage has been plaguing the country for years. Nevertheless, the country's growth has been slowing down and investors have been raising concerns.
The Japan market, on the other hand, has been static for years. But due to the March 11 earthquake in 2011 and the shut down of its nuclear power plants, the market is facing energy shortages despite low market growths.
Japan's government just announced new incentives for solar energy producers at JPY42/kWh (US$0.53/kWh) for 20 years. According to Bloomberg, this rate is twice as high as Germany's. Optimism in the solar industry has been reignited.
Japan's 2012-2013 budget for residential solar PV systems is JPY83 billion, said Digitimes Research.
The solar market in Japan has been hard to enter as the government has been protective of its domestic firms. Japan sets its own standards and asks firms that want to start solar projects to apply for licenses. The licenses are hard to get. Despite the difficulties, China-based solar firms such as Canadian Solar and Suntech have been eyeing the market for years. Taiwan-based solar firm Eversol recently announced the cooperation with Japan-based West Holdings to set up a joint venture to produce solar modules in Japan.
On the other hand, Japan's government recently announced the decision to restart two nuclear reactors in Oi, Fukui Prefecture. The announcement of the new renewable subsidies came a few days after the announcement of the plan to restart the two nuclear reactors. As the energy shortage problem worsens during summertime, the government in Japan is likely to adopt all kinds of formulas to solve it, despite the fact that some formulas can spark international criticisms.
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