Orix Presses Ahead With Solar in Japan Despite Grid Constraints

Oct. 17 (Bloomberg) — Orix Corp., the finance and leasing
company with renewable energy investments, plans to increase its
backing of large-scale solar projects in Japan regardless of
grid access constraints threatening to slow the industry.

The Tokyo-based company is targeting 800 megawatts of
“megasolar” projects in operation by March 2018, said Yuichi Nishigori, head of Orix’s energy and eco services business. Orix
currently has more than 430 megawatts of large-sized solar
projects either operating or under development, he said.

Orix, which also sells solar panels, may buy projects from
developers that are relinquishing approvals granted to them
under Japan’s feed-in tariff program, Nishigori said. Some non-Japanese developers are asking Orix to jointly invest or buy
their projects after having trouble pushing them through on
their own, he said.

“We are also developing solar in areas where grid access
is not becoming a problem,” he said, adding that Orix also
targets to increase its rooftop solar capacity to more than 100
megawatts from the current capacity of 70 megawatts.

Japan has approved about 72,000 megawatts of clean energy
projects since the introduction of a feed-in tariff program in
July 2012. At least five of Japan’s 10 regional utilities are
restricting grid access to new renewable projects while reviews
are conducted to see how much more clean energy — especially
solar — can be taken.

Solar Expansion

The utilities say two years of rapid expansion has begun to
strain their capacity to absorb all the new electricity from
sources that generate only when the sun shines.

The move is causing “troubles” to Orix’s business plans,
especially for solar projects the company has yet to lock in,
Nishigori said. Some of the developers that buy panels from Orix
are also affected, he said.

Aside from the 800 megawatts of megasolar capacity Orix
wants to build, the company is also considering a 430-megawatt
solar plant on the island of Ukujima with partners such as
Kyocera Corp. The plant has yet to secure grid access from
Kyushu Electric Power Co., according to Nishigori.

Storage Technologies

Batteries should be used more to absorb intermittent solar
power, Nishigori said.

“Fluctuating power will be absorbed more with batteries
and also with better grid management,” he said.

Orix last year set up a venture with NEC Corp. and Epco Co.
to provide battery rental services to reduce residential power
costs. Battery prices must decline by about half from current
levels, he said.

Orix plans to invest 300 billion yen ($2.8 billion) by
March 2018 in clean-energy technologies such as solar,
geothermal, biomass and wind, he said.

To contact the reporters on this story:
Chisaki Watanabe in Tokyo at
cwatanabe5@bloomberg.net;
Takako Taniguchi in Tokyo at
ttaniguchi4@bloomberg.net

To contact the editors responsible for this story:
Reed Landberg at
landberg@bloomberg.net
Iain Wilson, Indranil Ghosh

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