Japan’s green energy evolution by Michael Fitzpatrick @FortuneMagazine September 23, 2013, 3:37 PM EDT E-mail Tweet Facebook Google Plus Linkedin Share icons A Komatsu factory in Osaka, Japan FORTUNE — Japan took the last of its 50 once-vital nuclear power stations offline last Monday. But despite having one of the hottest summers on record, Japan has had no power rationing or blackouts this year. How did they do it? Put simply, the country cut back. “Japan’s nuclear reactors have mostly been replaced by post-catastrophe efficiency gains which reduced [energy] consumption by around 15-20%,” says Kevin Meyerson, a retired American businessman and now an energy conservationist living in Japan. “For example, offices throughout Japan have replaced high-consumption lighting with newly developed-in-Japan low-power LED lights, cutting office electricity consumption up to 40%.” Such conservation has made Japan’s vulnerable nuclear power plants redundant for the time being. Cutting energy demand by 10% across the board in Japan has eliminated the need for about 14 nuclear reactors, according to government figures. Leading the charge to unplug are major corporations like Komatsu, the world’s second-largest construction equipment manufacturer, which has pledged to cut its energy consumption by at least 50% by 2015. They are not alone. In the wake of the Fukushima disaster, public and private conservation efforts have helped keep power demand comfortably in check. MORE: Next for Germany’s Merkel: Fix Europe To be sure, Japan hasn’t gone entirely green. The nation has also turned to fossil fuels in a very big way. Dirty energy now accounts for 85% of Japan’s energy consumption, up from 60% within just two years. In a bid to reduce Japan’s dependence on foreign energy — 90% of its energy resources are imported — and CO2 pollution, Komatsu has aimed for a 50% cut in its electricity consumption by 2014. Without any reduction in production, the company claims it has already saved 40% over three years on energy costs by changing its manufacturing methods. Komatsu has replaced power-hungry pneumatics with battery-powered tools, for example — and introduced other power-saving technology. The firm has also installed solar panels on the rooftops of its buildings and is working on finding ways of taking advantage of renewable energy, such as using underground water as a coolant. Komatsu also plans to invest 30-40 billion yen by 2020 to rebuild its aging plants and replace them with factories and offices that can save energy by employing LED lighting. A 60-watt type LED uses about one-eighth the power that a 60-watt incandescent bulb uses, and is a technology that is improving exponentially each year. Such lighting can pay for itself in lowered utility bills within two years. Despite all the changes, there is still room for improvement in Japan, says Kenshi Itaoka, a professor at the International Institute of Carbon Neutral Energy Research, Kyushu University. “Conventional light bulbs and fluorescent lights are still used in a lot of places. This needs to change. LEDs are the way forward. We need to get the message out better.” Keen to encourage further energy savings, Japan’s government has set new targets for the nation’s domestic appliances. Energy efficiency is now required for over 20 different types of electronics. Such rules will get stricter. Air conditioners in Japan, which are 68% more energy-efficient today than they were in 1998, are now required to become twice as efficient by 2020. The country that gave the world the hybrid is also tapping into new technologies to cut emissions and boost efficiency. Panasonic’s solar panels have achieved the world’s highest conversion rate for turning light into electricity. The efficiency of its new silicon wafer solar cells does this at a rate of 24.7%, where previously the average was around only 10%. Hitachi, Fujitsu, and NEC, meanwhile, are jointly developing next-generation semiconductors they hope will operate by 2019 that will require just one-tenth of the power consumed by present-day devices. MORE: From Hooters Girl to the corner office Researcher Yuji Ohya of Kyushu University has developed an ultra-efficient wind turbine he calls the Wind Lens. The honeycomb-like structure could triple the amount of wind energy that is produced by offshore turbines, he claims. And with an eye on the market for outdoor heating, now dominated by the outrageously wasteful gas heater, Osaka-based inventor Ken Hashizume has come up with the idea of utilizing low energy LED technology he calls the Hot Pad. America could learn a thing or two from Japan, it seems. Japan’s energy efficiency is nearly twice as efficient as the U.S.; burning an annual average of 5,190 kilowatt-hours per capita compared to the U.S.’s average per household of 9,538 kilowatt-hours a year.