Revised strategy driving solar PV in Japan

September 24, 2014 | By

By the end of 2014, Japan is predicted to have added another 8 GW of solar photovoltaic (PV) installations to its current capacity; just more than 5.1 GW is expected to come online in the second half of the year, according to research and consulting firm GlobalData.

Yokohama, Japan. Credit: Wikimedia Commons

Driven by initiatives from the Ministry of Economy, Trade and Industry (METI), GlobalData says, these new developments follow a period of slow deployment for Japanese solar PV projects, which forced the METI to review the previous system of feed-in-tariffs (FIT) and led to the implementation of a revised strategy.

"Previously, companies encountered delays in acquiring approvals from government authorities for constructing PV projects on agricultural land, aggravated by developers waiting for further cost reductions in components," said Ankit Mathur, GlobalData's alternative energy project manager. "As a consequence, some developers neither finalized sites nor agreed a contract for purchasing equipment for PV power plant construction."

The METI moved to annul the FiT for projects that had failed to secure land and equipment by the end of March 2014, and to rescind any projects that had fulfilled only one of these requirements by the end of August 2014. Further, they introduced a clause stating that any projects approved during 2014 must have a finalized site and equipment contract within 180 days.

"These steps have created an immediate opportunity for module suppliers, although the installed cost of PV systems in Japan is generally higher than in other matured markets. From April 1, 2014, sales tax rose by 3 percent, making the total tax levy on solar PV systems around 8 percent," Mathur said. "The Japanese PV market is gradually moving from residential to non-residential areas, attracting experienced global developers to set up large-scale PV systems in the country. However, Japan's mountainous terrain and lack of connectivity between regional grids will continue to be obstacles to growth."

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