In Japan, Fuel Cells Offer Employment and Economic Hope

Eight months after the massive earthquake and nuclear disaster in Fukushima, Japan still faces questions about its energy infrastructure. While the Japanese government is still committed to nuclear as part of its energy portfolio, many in Japanese society question continuing such a path. To that end, some companies are ramping up their research and development efforts in developing clean energy technologies including new solar, methanol and fuel cell systems.

 

Panasonic stepped up its work on solar and fuel cell development even before the March earthquake struck. Energy systems compose on of the six key business units on which Panasonic will focus as the company edges towards its 100th anniversary in 2018. During my time in Japan, I had the opportunity to see up close the work Panasonic is doing on the fuel cell front. A tour of Panasonic’s “Ene-Farm” factory outside of Osaka gives on clue of Japan’s current and future economic transformation.

 

Panasonic’s work on fuel cells began over a dozen years ago. After several years of research and development, Panasonic installed a fuel cell module at the Japanese Prime Minister’s home in 2005. Commercial sales started in 2009, and the evolution of the company’s fuel cells says much about Japanese kaizen and the drive to transform a business model in an era where the price of fossil fuels will go no where but up.

 

The appearance of a fuel cell may not appear to be much, but to Panasonic’s engineers, it is an attempt to connect modern technology with timeless Japanese architecture and design. Horizontal wave siding hearkens back to Japanese traditional construction, and its silver color ties in with modern architecture. The system at first appears rather simple: create a chemical reaction between hydrogen and water to generate both electricity as well as hot water. But in a just a few years, both the technology and manufacturing have improved.

 

The factory I visited in Kusatsu, Shiga prefecture, has streamlined its fuel cells' design so that a slimmer water tank is attached now to the fuel cell module, replacing a bulkier tank that had been part of its construction. The result is that 50 percent less space is needed for installation than just a few years ago. The assembly of these cells has become more efficient, too. In 2008, it took 318 hours to complete one fuel cell; now that time has been slashed to 72 hours. Quality control was a tedious process, involving 318 inspections three years ago; now that is down to 55. Currently the Kusatsu factory churns out about 40 units a day. For employees at this factory, they now have high wage jobs without a long commute to Osaka or Kyoto.

 

The challenge of Panasonic is for the technology to scale so that it can become more affordable. With an life span ranging from 10 to 15 years, the 2.7 million yen (about US$30,000) is a challenge, even after government subsidies and tax breaks. Even with the amount homeowners save on energy costs, the return on investment is nil as most homeowners break even at the end. Nevertheless, the improvements Panasonic has made in three years alone suggests that the technology will become cheaper and result in more energy efficiency for home owners in the coming years. For a country struggling to find energy independence, Japan’s penchant for innovation and innovation in this sector is crucial for Japan to overcome what has been a trying twenty years of economic stagnation.

 

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Leon Kaye recently finished a tour, which included visits to several of Panasonic’s facilities, of Japan and Korea. Panasonic covered the costs of his Japan trip. You can follow him on Twitter and on the site he founded, GreenGoPost.com.