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ROBERT SIEGEL, host:

From NPR News, it's ALL THINGS CONSIDERED. I'm Robert Siegel.

MICHELE NORRIS, host:

And I'm Michele Norris.

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, appliances. No greenhouse gases, no pollution and no guilt.

SIEGEL: Here's the catch: Solar power has always been expensive. But costs have come down. And over the last few years, solar companies have entered unfamiliar territory - they are making a profit, at least in Japan.

NORRIS: And Japan is where NPR stops off this week on our yearlong collaboration with National Geographic exploring the effect of climate change on people's lives.

NPR's David Kestenbaum reports that in the country where the Kyoto Treaty was signed, the government is counting on solar energy to help reduce carbon emissions.

DAVID KESTENBAUM: I'd heard tales of a magical neighborhood in Kobe where all the houses had solar panels. I expected to find maybe off-the-grid environmentalists. I expected wrong.

(Soundbite of children playing)

KESTENBAUM: She's riding a bike with training wheels? Are you okay?

(Soundbite of girl giggling)

KESTENBAUM: And a girl in a unicycle. Pretty ordinary little Japanese suburban development.

Row after row of plain box houses, you have to tilt your head back to see the solar panels on the roofs. We sent a boy wearing a T-shirt that said Dinosaur Power to find his mom. Rika Suzuki came out. She said the solar panels came with the house. I asked if she considered herself an environmentalist. No, she said, not so much. What she likes is not paying electric bill.

Ms. RIKA SUZUKI (Owner, Solar-Powered House): (Through translator) When it's a nice sunny day, I feel like even though we use all the electronic products in our house, I feel like we are receiving the energy from the sun.

KESTENBAUM: The sun is giving them energy.

(Soundbite of electronic device)

KESTENBAUM: The houses here 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.

Ms. SUZUKI: (Japanese Spoken).

KESTENBAUM: How does that make you feel on those months?

Ms. SUZUKI: (Through translator) Lucky, I feel.

KESTENBAUM: So how did all this happen? Look closely. You'll see the solar panels were manufactured by a company called Kyocera. I went to Kyocera's offices a couple of hours away in Kyoto. A big shiny building for a big company, mostly it makes high-tech ceramic parts, $11 billion in annual sales. That's a good thing because for three decades their solar business was not profitable.

Mr. ISAO YUKAWA (Senior Managing Executive Officer, Kyocera): Yeah. Last 32 years, we couldn't make money at all, you know, but spending money a lot.

KESTENBAUM: Isao Yukawa has been at Kyocera all of those 32 years. He got involved with its solar efforts six years ago.

Mr. YUKAWA: But finally, in the last two to three years, you know, we started making money.

KESTENBAUM: I think that's quite a vision, because often you start on a business and you say, well, the first two years we won't make money but then after that we'll be okay. I mean, 30 years?

Mr. YUKAWA: Yes. You know, our founder is a very visionary guy, you know.

KESTENBAUM: Or crazy you would say, right?

Mr. YUKAWA: I guess he's crazy. At the same time he's a philosopher. So he talks about, you know, to work for the people and work for the society.

KESTENBAUM: Kyocera was founded by Kazuo Inamori in 1959, who is a kind of management guru in Japan. Do the right thing, he says, profits come later.

Isao Yukawa showed me a photo of their solar panels mounted on a camel in Tunisia. It was running a portable refrigerator with medical supplies.

Mr. YUKAWA: I was told that 1.6 billion people still do not have a light. So our mission is so much, you know, to support these people.

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

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 in, say, in 1994, if you wanted to put solar panels on your house — enough to cover most needs — it would cost you about $60,000.

Ryutaro Yatsu is counselor for global environment in the Ministry of the Environment of Japan. He says the industry needed the subsidies to create a market, so the costs could come down - to bridge the gap.

Mr. RYUTARO YATSU (Counselor, Ministry of the Environment, Japan): In order to bridge the so-called death valley.

KESTENBAUM: It's called the death valley?

Mr. YATSU: Yes. death valley.

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

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

Mr. YATSU: We expect each household have their own solar panel.

KESTENBAUM: And Germany wants half of its power to come from renewable sources by the year 2050.

(Soundbite of running machine)

KESTENBAUM: And companies are cranking out solar panels.

I saw at Kyocera factory where panels the size of CD cases got passed from one machine to another in an elaborate dance. The company can now produce enough to cover 300 football fields a year.

And we could end the story here, the happy story about birth of solar, except that things are a little more complicated.

Solar is on its feet, but it's not exactly off and running. Today's boom still depends on government assistance. Now, from Germany's government, boosting sales there. 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. How long would it take me to make my money back? Answer, in Japan, maybe 20 years.

Isao Yukawa at Kyocera says the sales pitch is still awkward.

Mr. YUKAWA: The solar business looks like it's so easy, but our - we have direct door-to-door sales guys, you know, so they have to explain this and that kind of stuff, you know.

KESTENBAUM: Those 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 businesses really take the plunge in a big way.

The industry is growing quickly — maybe a little too quickly. Solar companies now consume about as much silicon as the entire electronics industry. That's temporarily caused the price of silicon to skyrocket, pushing costs up, not down.

David Kestenbaum, NPR News.

SIEGEL: There is a map showing how climate change is affecting Japan and other parts of the world at npr.org/climateconnections, and in the current issue of the National Geographic Magazine.

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