The demand for PV solar in Japan is likely to peak in 2016 as grid constraints will curb future installationsThe data comes from Bloomberg New Energy Finance (BNEF)'s Q1 2016 PV Solar Market Outlook released last month.
BNEF predicts Japan's annual PV solar installation to reach 13.2GW-14.3GW in 2016.
The total capacity of grid connection limits is 25.6GW, of which 12.8GW was connected at the end of September 2015.
Challenges of land acquisition and securing financing for projects will also curtail demand for solar PV in 2017 and beyond, states BNEF.
Japan utilities - PV solar
TEPCO, the principal utility for the capital Tokyo and a leading power supplier in Japan, has the most installed solar capacity within its service territory.
Along with Kyushu and Chubu, the three utilities will account for 62.3% of Japan's cumulative installed solar capacity by the end of 2017, states BNEF in its monthly update report on Japan's renewable energy sector.
The report cites how in November 2015, seven of Japan's 10 vertically integrated utilities - Kyushu, Chugoku, Tohoku, Shikoku, Hokkaido, Hokuriku and Okinawa - have updated designated grid capacities for solar and wind but these will reach their maximum after 2017.
Japan's move towards electricity liberalisation may help the development of more grid capacity however as the country seeks to avoid blackout scenarios as experienced in the wake of the Fukushima Daichii nuclear power station disaster.
The Organisation for Cross-Regional Coordination of Transmission Operators (OCCTO), the regulatory body in charge of grid infrastructure, will finalise a plan in April 2016 that should see grid capacity between the TEPCO and Tohoku grid areas increase from 5GW to 11.2GW.
Residential solar demand
Meanwhile, at a residential level, demand has declined from a peak in 2013, according to BNEF data.
Osaka-based Panasonic has reportedly suspended production of solar cells and modules at its Osaka plant between February and November 2016.
[quote] BNEF analysts however suggest this may have more to do with its outdated Osaka production plant than a levelling off in the market.
At World Smart Energy Week, being held in Tokyo, this week, there are 1,430 exhibitors of which nearly half are serving the PV residential and solar market.
South Korean LG's John Kim, a project manager, Equipment Technical Sales, told Metering & Smart Energy International that there is still a wide variety of demands within Japanese market from commercial to residential and it was still a "good market for LG to show itself."
Many exhibitors are showcasing new complete energy solutions including solar Pv panels and energy storage units for domestic use.
When asked how vendors can stand out in the packed solar PV marketplace, Mr Kim said "common competitiveness is about conversion efficiency and a high level of generation".