Mitsui and Toshiba have announced that they will collaborate to build a 50-megawatt solar plant in Japan, a deal that could become part of a wave of utility-scale projects in that country.
The plant, if built, will take up 800,000 square meters on land owned by Mitsui Chemicals. A 6-megawatt wind farm will also be built on the site. Chubu Electric, ideally, will buy the power.
Although Japan has had a national solar policy since the 1970s, most of the solar arrays are located on roofs. The Fukushima disaster and the widespread anger that has followed in its wake, however, has suddenly made utility-scale solar farms attractive and, arguably, viable. Masayoshi Son, the entrepreneur behind Softbank, earlier this summer announced plans to invest close to $1 billion to build 10 large-scale power plants in the country.
The Diet is close to approving an energy bill proposed by Prime Minister Naoto Kan that would lead to Japan getting 20 percent of its power from renewable sources by 2020.
A push on solar would, of course, give the government an opportunity to create jobs. Local manufacturers like Sharp and Panasonic/Sanyo face stiff competition from Chinese manufacturers in Germany, the U.S. and Italy. A domestic market for solar panels could spur demand for their products. While these companies manufacture globally, they also build factories in Japan, a factor politicians won't likely ignore.
How many solar plants will get built? How much will they cost? Will the nuclear industry, which also employs many in Japan, somehow make a comeback? We don't know. But at this point, it's clear that solar and renewables seem to be in a pretty good position.
Many Japanese companies already believe that energy and energy efficiency will become export opportunities. Earlier this year, Toshiba bought metering giant Landis+Gyr for over $2 billion, while Mitsui invested in green building startup Redwood Systems and created a joint venture with Transcend Equity. Hitachi, meanwhile, works with Molycorp, the rare earth mineral specialist, and Panasonic says it will be number one in green electronics by 2018.
Although real estate will be a challenge, a surprising amount of open land and fallow farmland actually exists in Japan. The difficulties could lie in untangling leases and ownership rights. Biofuels, a source in Tokyo explained to me once, are extremely difficult because of leasing issues.