Democratization Of Energy In Japan – It’ll Be Here Soon

UPDATE: I recommend anyone who is interested in this post to read this at Lenz Blog. There is a fantastic short video interview with the German parliamentarian in charge of energy and the environment on FITs and why they’re so successful. It’s highly related to this post!

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The major media covering the Japanese feed-in-tariffs (FITs) are missing an angle which I believe is significant. The democratization of energy is going to be a huge change in Japan. Individuals will be taking a major share of the power generation market for the first time in Japan’s history.

Many pundits in the Japanese media are discussing the large business opportunities for companies afforded by the FITs system. Of course there will be massive entrepreneurial opportunities for new players, and legacy energy companies will also participate.

A potentially much larger revolution in in the making is the participation of individual residents in Japan. Japan’s personal assets continue to be enormous and are much of it is controlled Japanese housewives who are quite frustrated by nuclear power and the current energy companies.

Traditional Japanese households are very conservative with their savings and typically invest in postal savings or low interest bank accounts. The new FITs system allows for much higher returns with very stable earnings for these investors.

There is also enormous amounts of unused land in Japan, which is counter-intuitive to many. Rooftops are also wide open for developments throughout the country.

What happens when individuals start investing into solar power generation stations using vast swaths of unused land in post Fukushima Japan? Massive increases in democratically owned power generation is what happens.

Germany is an excellent example. Currently, over half of German renewable power generation is owned by individuals and farmers. Traditional energy companies own a small percentage.

Japan’s current political climate as well as it’s financial and geographical resources are setting up the perfect storm for the creation of an energy democracy like the world has never seen. Looking forward to watching this history in the making develop over the next several years!

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6 thoughts on “Democratization Of Energy In Japan – It’ll Be Here Soon

  1. You might be interested in what German politician Ulrich Kelber has said on that issue, see this post in June last year: http://k.lenz.name/LB/?p=3028
    As I said at the time, democratization of energy generation has some similarity to the principle of network neutrality that is a basic rule of the Internet. Plug in whatever you want, not only what some big traditional player wants.

    • Fabulous post! Thanks for introducing it here. I highly recommend everyone to check out the video in Karl’s post linked above. I will also add a link to the main article, as well!

  2. well done! I wrote a paper on this last year as an undergraduate in economic history. Its as if we really are coming up on a dam burst scenario with this, because the monopolies of govt and big business have been suppressing it for so long. the result is has been building pressure of demand and development for small scale tech, which offers solutions to so many problems on so many levels.

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