Japanese homeowners may see the profit in solar energy lease option

02/02/2012
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TOKYO (majirox news) — Yukio Edano, the head of the Ministry of Economy, Trade, and Industry (METI) came up with an idea so sensible that you may wonder why no one thought of it before. Edano is best known as the government spokesman who appeared on TV almost nightly during the Fukushima disaster to announce the latest counter measures and progress. He has since moved on to be the head of METI, and as such, his idea stands a good chance of becoming law and actually going into practice.

Edano proposed that homeowners be allowed to rent out their roof tops to companies that would install solar cells on them and pay the owner monthly rent while selling the surplus to electric companies. For practical and legal reasons, this has never been possible before.

“If it is up to homeowners to install solar panels, then it will take time for there to be enough to really matter,” says Edano. “But if they are allowed to rent out their roof tops to companies that will install solar panels on them, then the home owner has a source of revenue and electrical companies looking for places to locate solar panels will have a place to put them.”

Up until now, other than private home owners, most Japanese solar energy installations have tended to follow the pattern of the United States and Europe: Concentrated industrial size central installations that are power plants in the same sense as coal-or oil-fired power plants.

“Mega solar is the current trend,” reported the Asahi Newspaper on Edano’s idea. “But in Japan, the desire for ordinary households to have renewable energy may fuse with the economic power of corporations to form a unique system.”

From July onwards, electrical companies around the nation will be required to purchase renewable energy from producers, and Edano’s idea is meant to give a big boost to the production of alternative energy.

Installing solar panels on the roof top of an ordinary home, which usually produce three to four kilowatts, costs around two or three million yen ($25,000 to $37,000), plus the cost of yearly maintenance. Homeowners can then sell any surplus energy directly to the electric company, but presently, it takes on an average of 10 to 20 years to recover their investment.

However, from July onwards, they will be able to lease their rooftops to electric companies, which will install the solar panels and sell the electricity to large-scale electricity customers. It has many advantages, not the least of which is that large corporations, able to buy hundreds or thousands of panels at once, will be able to get major cost breaks on solar panels. Moreover, many of the problems with installing the panels and insuring and maintaining them are now out of the householder’s hands, which will give a major impetus to construction business on all levels through the country. It could be one of the most important economic shots in the arm Japan has had in ages.

Edano’s new system will come into being “this summer” according to METI. However, in a situation like this, there are many challenges, and at present, with the exception of large billboards, there is nothing quite like this in existence. Thus, considerable thought is going into how to prevent friction and conflicts and determine optimal contracts for all parties involved.

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