In Japan, Going Solar Costly Despite Market Surge

A solar-panel neighborhood in Kobe. i i

Children play in a Kobe neighborhood where all of the houses have solar panels. They are a line of energy-efficient homes designed by the electronics company Panasonic. David Kestenbaum/NPR hide caption

itoggle caption David Kestenbaum/NPR
A solar-panel neighborhood in Kobe.

Children play in a Kobe neighborhood where all of the houses have solar panels. They are a line of energy-efficient homes designed by the electronics company Panasonic.

David Kestenbaum/NPR

Mapping Climate Change

  

Warming surface temperatures signal a decisive shift in the global climate.

Graphic. i i

Government assistance in Japan and Germany has helped sales of solar panels. Lindsay Mangum, NPR hide caption

itoggle caption Lindsay Mangum, NPR
Graphic.

Government assistance in Japan and Germany has helped sales of solar panels.

Lindsay Mangum, NPR
Solar panels at a Kyocera factory. i i

After three decades of losing money, Kyocera is finally making a profit with its solar business. Kyocera produces enough solar panels in one year to cover about 300 football fields. David Kestenbaum/NPR hide caption

itoggle caption David Kestenbaum/NPR
Solar panels at a Kyocera factory.

After three decades of losing money, Kyocera is finally making a profit with its solar business. Kyocera produces enough solar panels in one year to cover about 300 football fields.

David Kestenbaum/NPR

It's hard not to like the idea of solar power. Put some panels on your roof and there you have it — free electricity from sunlight running your TV and appliances. No greenhouse gases, no pollution and no guilt.

The catch: Solar power has always been expensive. But costs have come down. And over the last few years, solar companies are finding themselves in unfamiliar territory: They are making a profit.

Solar Panel Street

Houses with solar panels are still unusual in Japan, but you can get a glimpse of where things are headed in Kobe. In one new development there, the houses come with solar panels pre-installed.

It's row after row of plain box houses. You have to tilt your head back to see the solar panels on the roofs.

A neighborhood boy wearing a "Dinosaur Power" T-shirt sets off to find his mother, Rika Suzuki.

She says she doesn't consider herself an environmentalist. What she likes is not paying electric bills.

"It depends on sunlight," Suzuki says. "But on a nice sunny day. Even though we use all the electronic devices, I feel like we are receiving energy from the sun."

The houses have indoor electronic displays which show how much electricity the panels are generating and how much is being used. Extra electricity gets sold back to the power company. Suzuki says some months, they pay basically nothing.

Suzuki says she feels lucky.

The Philosophy of Energy

So how did all this happen? The solar panels were manufactured by a company called Kyocera, with offices in Kyoto.

Kyocera has $11 billion in annual sales, mostly from sales of high-tech ceramic parts. That's a good thing, because for three decades their solar business was not profitable.

"Last 32 years, we couldn't make money at all, but were spending money a lot," says Isao Yukawa who has been at Kyocera all of those 32 years. He got involved with its solar efforts six years ago.

"Last two to three years we're making money," Yukawa says.

Some start-up businesses expect a couple of years of not making a profit. But 30 years? Yukawa says the company's founder is a very visionary guy.

"At the same time he's a philosopher," Yukawa says. "He talks about work for the people and the society."

Kyocera was founded by Kazuo Inamori in 1959, who is a kind of management guru in Japan.

Do the right thing, Inamori says, profits come later.

Yukawa shows a photo of their solar panels mounted on a camel in Tunisia. The panels ran a portable refrigerator with medical supplies.

"I was told that 1.6 million people still do not have light!" Yukawa says. "Our mission is so much to support these people."

The company's motto: "Respect the divine and love people."

Creating a Market

But if Kyocera's success is a story of perseverance and maybe spirituality, it's also one of government subsidies.

Because the reality was that around 1994, if you wanted to put solar panels on your house — enough to cover most electrical needs — it would cost about $60,000.

Ryutaro Yatsu is a counselor for global environment in Japan's Ministry of the Environment. He says the industry needed the subsidies to create a market, so the costs could decrease.

"In order to bridge the so-called 'Death Valley,'" Yatsu says.

In 1994, the Japanese government paid half the cost of new solar installations. And people took advantage. Sales went up and costs came down by about a third. The government phased the subsidies out gradually and ended them in 2005.

Today, Yatsu says Japan is counting on solar panels to help combat global warming.

"We expect each household to have their own solar panel," Yatsu says.

Germany wants half of its energy generated by renewable sources by the year 2050.

And companies are cranking out solar panels.

In a Kyocera factory panels the size of compact disc cases get passed from one machine to another in an elaborate dance. The company can now produce enough panels to cover 300 football fields a year.

However, things are a bit more complicated.

Retaining the Interest

Solar is on its feet, but it's not exactly off and running. Today's solar boom still depends on government assistance. Solar panels are at the point of making economic sense on their own, but just barely.

If a salesman came to your door and said "I have a way you won't have to pay electric bills," you'd say "great."

But how much are the solar panels? About $20,000 dollars.

How long would it take to make that money back? In Japan, maybe 20 years.

Yukawa says the sales pitch is still awkward.

"Solar business looks so easy," Yukawa explains. "But we have direct door to door guys that have to explain this and that kind of stuff."

The houses in Kobe with the solar panels were built by a division of Panasonic, which is trying out a line of energy-efficient houses.

But Yukawa says the price of solar panels still needs to come down by half before homeowners and builders really take the plunge to buy.

The industry is growing quickly — maybe too quickly. Solar companies now consume about as much silicon as the entire electronics industry, temporarily causing the price of silicon to double, pushing costs up, not down.

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