In the 2000s, the solar industry was dominated by Japanese engineering and innovation. Solar manufacturers such as Sharp, Kyocera, Sanyo (now Panasonic) and Mitsubishi Electric were leading suppliers worldwide, and they garnered more than half of the global market.

Fast forward to 2023, and Japan’s once vaunted solar panel industry, which was the envy of the green energy world, is in the doldrums, barely hanging onto life. While the overall volume of the global solar market has increased exponentially, Japan’s left with a tiny market share as Chinese manufacturers race ahead. While Sharp Corp still produces solar cells, in 2016 it was acquired by Taiwan’s Hon Hai Precision Industry. Panasonic stopped production of solar panels in 2021; Kyocera also stopped domestic production in 2017. Mitsubishi Electric started to use imported solar cells from 2018. In fact, as of 2022, only one small Japanese firm makes conventional monocrystalline silicon solar cells.

This sad state of affairs recently culminated with the announcement by energy major Idemitsu that its subsidiary Solar Frontier will stop manufacturing solar equipment. Solar Frontier was the last active Japanese player in the solar equipment space, and its exit basically means that Japan has raised the white flag on the solar tech that’s currently in commercial exploitation.

Given this precarious situation, it might be easy to write off Japan as a solar market player. Indeed, how could it possibly catch up with China and India, both of whom are making massive investments in solar R&D and manufacturing, and which enjoy a big advantage thanks to lower labor costs, state support, and a huge domestic market. But just when it seemed that all was lost, a leap in innovation has led to breakthroughs in next-generation solar power. According to patent data and a survey of industry participants, Japanese manufacturers believe they could stage a comeback.