EnergyTrend: Japan PV demand to remain high despite FiT cuts

Facebook
Twitter
LinkedIn
Reddit
Email

Trendforce research division EnergyTrend has issued a report claiming that PV demand is expected to remain strong in Japan for 2014 and 2015 in spite of rumoured feed-in tariff cuts.

The company has reported “rumours” that the Japanese Ministry of Economy, Trade and Industry is considering cutting the feed-in tariff subsidy for PV downward to ¥34/kWh (US$0.33/kWh) in 2014 and to ¥30/kWh (US$0.29/kWh) in 2015.

This article requires Premium SubscriptionBasic (FREE) Subscription

Unlock unlimited access for 12 whole months of distinctive global analysis

Photovoltaics International is now included.

  • Regular insight and analysis of the industry’s biggest developments
  • In-depth interviews with the industry’s leading figures
  • Unlimited digital access to the PV Tech Power journal catalogue
  • Unlimited digital access to the Photovoltaics International journal catalogue
  • Access to more than 1,000 technical papers
  • Discounts on Solar Media’s portfolio of events, in-person and virtual

Or continue reading this article for free

The company did not cite a source for the rumours, although it has been understood from the beginning of the feed-in tariff’s implementation in July 2012 that a further managed degression is possible next year.

In an interview conducted by PV Tech's sister publication Solar Business Focus in August with Professor Kazuhiro Ueta, head of the panel recommending feed-in tariff rates to the Japanese government, confirmed that the government would decide feed-in tariff rates based on each previous year’s data. The first three years of the policy is expected to provide “the means to generate a profit above the cost of entering the industry.”

According to Professor Ueta, the feed-in tariff is expected to continue to provide an incentive to encourage added solar power generation capacity, without causing a 'bubble' to form where profits far outwieghed the cost of generating electricity.

The Japanese fiscal year, which runs from 1 April to 31 March is expected to see a slowdown in installation during the last few months of this calendar year due to weather conditions not being suitable for construction, but EnergyTrend predicts that construction will increase steadily again from 31 March 2014. EnergyTrend’s report quotes expected return on investment for manufacturers in Japan at 17% in 2014 and 2015.

EnergyTrend expects Taiwanese producers to benefit from ongoing strong demand in Japan as some Japanese companies in the PV industry focus on systems and to outsource manufacturing, often to foreign makers in China for modules and Taiwan for cells. The company predicts Taiwanese manufacturers in the fourth quarter of 2013 to “be more aggressive towards module capacity expansion”. EnergyTrend expects Taiwanese companies to continue outsourcing for Japan as well as considering options for producing cells and modules in Taiwan and establishing brands in China.

The EnergyTrend report also gave the company’s latest reports on manufacturing, including news that the average price for polysilicon wafers rose by 0.22% last week to US$0.901/piece, while mono-si wafers dropped by 0.75% to US$1.184/piece.

Installed capacity for PV in Japan, especially in utility-scale projects, has fallen short of the amount approved by the government to receive subsidies, with only around 2.4GW installed out of 20.3GW of approved projects between July 2012 and the same month this year.

One stumbling block for projects is understood to be grid connection and capacity, with Japan’s electricity supplied by a regional network of grids, with poor interconnectivity.

Earlier this month, Japan passed reforms that promise the establishment of an independent body to oversee electricity supply and demand by the end of 2015. With the ultimate aim of moving toward distributed energy, utilities will then be required to ‘unbundle’ their electricity offerings, separating generation, transmission and retail operations which are currently overseen by one entity for each of 10 networks.

Read Next

Subscribe to Newsletter

Upcoming Events

Solar Media Events
April 10, 2024
Dallas, Texas USA
Solar Media Events
April 17, 2024
Lisbon, Portugal
Solar Media Events
May 1, 2024
Dallas, Texas
Solar Media Events
May 21, 2024
Napa, USA