Japan sets feed-in tariffs for the 2020 Japanese Financial Year

The shift to rooftop markets has been long anticipated - pictured are Panasonic HIT modules specifically for tall buildings on show at PV Expo in Tokyo in 2017. Image: Andy Colthorpe / Solar Media.

Feed-in tariffs (FiTs) in Japan for solar PV systems have now been provisionally set by the national Ministry of Energy Trade and Industry (METI) for the next financial year, which begins in April.

The country has been preparing to graduate the market away from the premium-level incentives that started off at more than ¥40 per kWh (US$0.36) in 2013, when the programme was introduced to kick-start the market in the wake of the Great East Japan Earthquake of 2011 which resulted damage to Fukushima Daiichi nuclear power station.

The subsequent shuttering of nearly all of Japan’s nuclear generation facilities has left an advanced industrial economy without many natural resources of its own highly dependent on expensive imported fuel.

While this mainly means liquefied natural gas (LNG) – many tanker trucks carrying the fuel are seen on Japan’s roads – and latterly on a turn back to coal generation which is expected to include a dependence on coal imported from Australia.

However, while wind energy has been slow to take off and other options such as geothermal appear a non-starter (despite abundant resources, local pressure means it is unlikely this will ever be popular) solar PV generation in particular is now becoming competitive with grid electricity.

The biggest market dynamic shift within the solar industry is the move away from the much-vaunted ‘mega-solar’, grid-scale projects that created many-gigawatt pipelines of projects, both completed and commissioned, as well as a large number that have gone unbuilt.

In a meeting yesterday with PV Tech / Energy-Storage.news, Izumi Kaizuka, a manager at Tokyo-based solar PV industry analysis and research firm RTS PV revealed and discussed the new FiTs and Japan’s industry dynamics for solar – and increasingly energy storage – for a feature article to be published in the forthcoming quarterly edition of PV Tech Power (Volume 22).

Dawn of third-party ownership – ‘Zero Yen Installation’

Going forwards, Kaizuka said that the emphasis on rooftop solar generation, both at residential and commercial and industrial (C&I) level will continue. The analyst said that the primary driver of the rooftop market is self-consumption, because of the reduced level of FIT while demand for renewable power is increasing for many companies. Many providers in the solar industry have now entered third-party owner models, known in the US as “no money down” deals, or in Japan as “Zero Yen Installation” business models.

Large-scale solar has quietened down as land suitable for ground-mounted development is now at a real scarcity, while developers and owners of that aforementioned unbuilt mega-solar pipeline have a deadline of March this year to make good on their feed-in tariff awarded projects, Kaizuka said.

Japan’s feed-in tariffs (FiTs) for the 2020 Japanese Financial Year (JFY2020)

System size Feed-in tariff rate (¥ per kilowatt-hour)
Systems below 10kW 21
Systems between 10kW and 50kW 13
Systems between 50kW and 250kW 12
Systems >250kW N/A (competitive tender process held to determine prices)

There is still to be a public hearing held next week, but it is understood that it is very unlikely for any alterations to occur as a result of that process.

Meanwhile, domestic FiTs actually began in 2009, for a 10-year contracted period. More than 500,000 of these residential tariffs have now expired, meaning that homeowners are targeting self-consumption of power with batteries, or looking to broker power purchase agreement (PPA) contracts with the many new retailers that have sprung up to serve Japan’s deregulated, or unbundled, electricity market.

It has long been planned that this next financial year will be the last in which FiTs are offered, meaning that Japan is seeking new ways to support the deployment of solar PV, with the government targeting more than 130GW by 2030.

Subscribe to and read the next issue of PV Tech Power, out towards the end of February in time for PV Expo in Tokyo, to learn more.

27 September 2022
The demand for rooftop solar PV is soaring, driven by falling costs of the technology against energy crises that are gripping countries globally. But while an increasing number of households turn to solar to generate their own electricity, there is now a need for more specialist equipment, technologies and services to ensure the solar transition can reach as many customers as possible. Delivering these is now a major challenge for rooftop solar installers. This webinar will analyse the characteristics of the rooftop solar market, discussing how the products, logistics, installation and servicing of solar systems has evolved in line with consumer demands.

Read Next

September 22, 2022
Tech major Amazon has expanded its renewables portfolio globally with 71 new projects with a total capacity of 2.7GW.
September 21, 2022
Under the REPowerEU scenario to install 750GWdc of solar across the European Union by 2030, the bloc will require 1 million solar workers, double the numbers from 2021.
September 14, 2022
Private equity giant BlackRock Real Assets has acquired New Zealand solar and energy storage provider solarZero.
September 9, 2022
Japan’s 13th solar auctions have been heavily undersubscribed as developers struggle with land availability, support levels and familiarity with power market access, according to Shulman Advisory, a Tokyo-based renewables analyst agency.
September 8, 2022
The UFLPA could limit solar deployment through 2023 due to module availability constraints, delaying the benefits of the IRA to 2024 and beyond.
September 6, 2022
Five of Asia’s biggest economies will exponentially grow their solar capacity in the coming years, according to new analysis from think tank Ember.

Subscribe to Newsletter

Upcoming Events

Upcoming Webinars
September 27, 2022
15:30 AEST (UTC +10)
Solar Media Events
October 4, 2022
New York, USA
On-Demand Webinars, Solar Media Events
October 11, 2022
Virtual event
Upcoming Webinars
October 18, 2022
10am (EDT) / 4pm (CEST)