Driven by the record-high oil prices of 2008, falling prices of photovoltaic (PV) panels in 2009 and growing concerns over global warming, governments throughout the region have started to look to the sun as an increasingly feasible source of renewable energy, albeit a limited one.

China, India, Japan, Taiwan and Thailand have introduced subsidies to promote the use solar panels on rooftops and as small power producers.

In Japan, no newcomer to sun power, subsidies and people’s growing awareness of climate change helped solar sales more than double in 2009, when capacity surged by 484 megawatts, according to the Japan Photovoltaic Energy Association.

An estimated 50 million Japanese households now have solar panels on their roofs – many for hot water use. Solar homes account for 88.7 percent of the total output.

In January, Japan reinstated subsidies for homeowners who purchase solar power systems, reducing costs by almost half, and in November, it introduced a feed-in tariff, similar to Germany, which requires utilities to buy excess solar power supplied to the electricity grid.

China, the world’s leading PV exporter, is now promoting domestic use. The government aims to increase China’s solar power generation capacity from 50 megawatts in 2008 to up to 20 gigawatts in 2020.

Taiwan, another leader in PV exports, has allocated US$280 million to subsidize a “100,000 solar roofs program.” The government hopes to install 1,000 megawatt in solar-power capacity annually by 2025, compared with 6 megawatt now.

India has announced ambitious plans to boost solar output almost 1,000-fold to 20,000 megawatt by 2022.

Thailand took the lead in promoting solar use in South-East Asia last year when the government introduced a feed-in tariff to encourage companies and homeowners to invest in the renewable energy.

Corporate interest has been surprisingly strong, with proposals already on the table to invest in a crop of solar farms with capacity of 30 to 90 megawatts.

The region’s solar boom is partly due to a sharp decline in PV prices last year, attributed to over-supply in a market hard-hit, especially among Western buyers, by the global recession.

That glut was in part due to Asian PV suppliers that had beefed up production to meet demand in affluent markets such as Germany, which has been heavily subsidizing investments in solar usage for more than a decade.

“Germany has been very good for us,” said Twarath Sutabutr, deputy director of the alternative energy department at Thailand’s Energy Ministry. “They were the first in the market so they bought at high prices. Thailand has come in later, so we are enjoying lower prices.”

Use of solar energy is largely about pricing.

To encourage investment in solar systems, governments need to introduce feed-in tariffs to buy back the energy at rates above market price.

The bigger the market for solar systems, the greater the supply and, eventually, prices come down because of economies of scale and new technologies, one hopes.

“I don’t think there is an expectation of increased pricing for solar,” said Chris Webber, a research associate with the Institute for Development Policy and Management at the University of Manchester. “It would be comparable to forecasting that laptops and PCs are going to go up in price; the trend is definitely downward across the globe.”

But there are other price-factors involved.

In Thailand, for example, solar roofs haven’t taken off partly because most roofs are built for a hot climate, and cannot take the extra weight without added investment in roof reinforcements.

Solar farms are land-intensive. It takes about 1.5 hectares of solar panels to create 1 megawatt of electricity per annum.

And not all land, or even countries, are suitable for solar. The Philippines’ Department of Energy deems the country’s position just above the equator not suitable for “vast potential for solar energy applications,” compared to other sources of renewable energy such as wind and geothermal.

Then there is the question of just how long can governments afford to subsidize renewable energy such as solar before passing the cost on to consumers.

That has become a political issue in Germany, where the government’s recent efforts to unwind its feed-in tariff program has run into stiff resistance from the new solar-industry lobby.

German consumers may see their electricity bills rise by 50 to 100 euros ($68 to 136) for this year, a price jump most Asian consumers would not stand for.

“You like to have green energy but who will pay?” said Bundit Sapienchai, an executive vice president at Bangchak Refinery which is investing in Thailand’s first 30-megawatt solar farm. “So the government has to help in promoting this and industry has to help themselves by reducing prices.”