Everyday we read about advances being made in the field of renewable energy, in terms of both technology and commercial viability, so much so that it is seriously disappointing to also read that so many people in the developed world still rely heavily on fossil fuels, not to mention nuclear power, whose increasing acceptance as a solution to global warming by parties that used to dismiss it demands more scrutiny. The gripes against renewables remain much the same as they’ve ever been: limited access due to natural phenomena, poor infrastructure, corporate laziness and/or impacted interests.
In the end, the problems facing renewables come down mainly to availability and their relationship to what we’ve come to call the grid. The utopian ideal for residences is for every home or apartment building to have its own solar system that would be supplemented by storage batteries or connections to the grid that itself would be powered by renewable energy sources, and a new community in Saitama Prefecture has come about as close to this ideal as we’ve yet seen in Japan.
An article in the Nov. 26 Tokyo Shimbun describes an experimental community in Midori Ward, Saitama City, which is being managed by the “new” energy company Looop. At present, the housing development contains 51 tightly packed single-family homes, each with its own rooftop solar system connected to a grid that serves only this community. The first thing that struck me upon reading the article was that Looop sees it as a profit-making endeavor. The residents do not get free electricity the way many homeowners with unique solar systems do. They pay Looop for the energy they need.
Consequently, the advantage, at least economically, isn’t immediately apparent, so Tokyo Shimbun gives an example of how one household uses the system. A 35-year-old man, husband and father, gets up in the morning and takes his three kids to daycare and school. He then returns home and rinses the breakfast dishes, after which he asks the AI service Alexa to boot up the special tablet and access the power table, which predicts, based on weather forecasts, the day’s solar energy collection potential and displays the resulting usage in units of ¥5 per hour. The minimum cost of the electricity is ¥20 for 1 kw/hour. He then consults the graph to decide when is the best time to run the dishwasher, the appliance that uses the most energy.
As illustrated, the point of the Looop system is to provide users with the raw data of both energy availability and how they can use it. They know how many hours the sun will shine as well as climate factors that also affect solar collection. The tablet is the user’s interface with their energy system, allowing them to devise a conservation regime that fits their lives. Looop also offers natural gas to those in the community who prefer it to electricity, but the company asks residents to use as much electricity in the daytime when the sun is out. That way, any excess electricity can be stored in the large storage battery as well as the two EVs that are centrally located and accessed by the community. The family profiled by Tokyo Shimbun uses IH stovetops rather than gas burners. They tend to only use gas for heating water at night, but use electric water heaters during the day. They also have a clothes dryer, which they have to use at night because it’s mainly for the kids’ clothes.
The family’s monthly energy bill, which includes the cost for both electricity and gas, comes to about ¥15,000. Some of this cost is from energy that Looop buys from outside renewable energy sources. The prices they pay are fixed, so there is no worry about fluctuations due to market effects. Consequently, Looop does not add the kind of surcharges that the major regional utilities add when the price of oil goes up. For instance, the gas that the family buys is always ¥1,000 a month. If their electricity bill fluctuates, it’s only due to changes in their usage. Prior to moving into the community last March, the family lived in a condominium and they paid about the same in energy fees as they do now even though their present house is much larger.
Looop’s business model is easy to understand. They distribute solar panels. To build the community they contracted with three home builders, including Takasago Kensetsu, a local company that has built a strong reputation for quality insulation work (which should be standard throughout Japan but still isn’t, though it’s much better than it used to be). The development isn’t completely a free enterprise project. It’s part of the Smart City Saitama Model, which began in 2009 when Saitama started promoting the sales of EVs. After the city experienced the planned power outages that accompanied the Great East Japan Earthquake of 2011, it intensified the Smart City program as part of its disaster mitigation and carbon neutral schemes. Construction of the community itself began in 2016 in a somewhat remote area that’s nevertheless only 10 minutes from the Urawa Misono Station on the Saitama Kosoku Tetsudo, which connects the area to Tokyo.
But it’s expensive. All 51 houses sold immediately, for prices in the ¥50-70 million range. According to Takasago staff, they didn’t have to do any extensive advertising since most of the promotion was done word-of-mouth. In fact, the project’s reputation traveled overseas. Someone from the U.S. government inspected the community last year as a model smart city.
The main takeaway from the project, at least so far, is that the community is based on a profit-making model. Looop does receive a subsidy from the environmental ministry simply because the government has a policy to promote renewable energy projects, but Looop was frank with Tokyo Shimbun in saying that its long-term goal is to ensure enough revenue to pay for maintenance and administrative costs without public subsidies. Another goal is eventually to be totally self-sufficient, meaning they don’t have to buy any electricity from outside sources, and that’s where they need to work more with their customers. Looop wants to make money, but they also want to achieve something, which is to produce just enough electricity to meet the needs of their customers so that those customers will pay less than they have paid in the past, and yet still live very comfortable lives. As it stands, the conventional power utility model is still very wasteful, no matter how much energy conservation their customers achieve. If Looop can make their model work well for everyone involved, then maybe more communities will copy it. Of course, as it stands this model is designed for smaller communities, which means, in the long run, those large utilities will lose out. Will they accept that eventuality, or resist?