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The penetration of photovoltaic (PV) systems in Japan has been on the rise. Two factors have been promoting the increase: improved generation efficiency of PV modules and governmental subsidies for the initial cost of residential PV generation systems. As a result, the cumulative installed PV capacity has increased exponentially; however, the cumulative installed PV capacity by 2007 was only about 40% of the target for 2010 (4,820 MW). Reaching the target and promoting larger installation capacities in the future will require further installation in the residential sector and the construction of large-scale PV systems. The New Energy and Industrial Technology Development Organization (NEDO) of Japan has conducted several demonstration projects to investigate technological issues regarding the large penetration of PV generation systems and to develop new technologies for using PV generation systems effectively. One of NEDO's demonstration grid-connected PV projects is the Ohta Project, a cluster of PV systems in a residential development. Another is the Wakkanai Project, the largest central-station PV system in Japan.