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!
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!