Japan threat triggers action from developers, FiT cut rumours quashed

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The response to a call for almost 300 would-be developers of large-scale PV projects in Japan to get necessary paperwork to start construction in order or risk losing feed-in tariffs appears to have been encouraging, according to a Japanese government spokesman.

The spokesman also appeared to quash recent rumours that a drastic cut to FiT levels is already being planned for the beginning of Japan’s next financial year, April 2015.

Kazuya Aoyama, renewable energy spokesman in the Agency for Natural Resources and Energy, a division of the country’s Ministry of Economy, Trade and Industry (METI), told PV Tech that “a large number” had responded to the call for developers to produce land use rights for their projects, as proof that construction would go ahead. 

Close to 65GW of PV projects in total have been given equipment accreditation to receive the FiT to date in Japan. Yet by the end of March 2014 when the last Japanese financial year ended, the country had only around 8.66GW installed, albeit still enough to put Japan near the top of worldwide installed capacity charts. As reported by PV Tech several times since early February, 288 solar PV projects were given until 31 August to produce the documentation. There had been some controversy over the possibility that some developers might be waiting for costs to go down before executing projects that will receive the higher FiT rates of FY2012 in particular, thus maximising their profits. While this was possible, Dr Hiroshi Matsukawa of RTS PV, an analyst based in Tokyo, recently said there were multiple other reasons why projects had not gone ahead, including the difficulty in Japan of repurposing agricultural land for other uses. 

“It is too early to be able to give out figures as the applications are still being counted,” METI's Aoyama said.

“A large number of people [developers] came forward to METI and submitted forms pertaining to land use rights, in response to the 31 August deadline.”

Aoyama said the ministry would be assessing the paperwork and confirmed that any developers that had not responded in a satisfactory manner would be likely to face FiT revocation hearings. An earlier deadline which had been set for developers with neither land use rights not equipment accreditation in place resulted in 144 projects losing their FiTs. He also pointed out however that grid connection remained the greatest obstacle to Japan’s ongoing deployment of PV on a grand scale.

“There are two major problems relating to projects that have been approved but not begun operations. One problem is that some developers that were signed up for the higher FiT in H24 [financial year 2012] but haven’t started operating, so that when these begin operating, it could cause a serious public burden. The other serious problem is with getting projects interconnected [to grids]. Developers have applied for interconnection but are not able to get it due to a lack of availability,” Aoyama said.

“This will of course be likely to have an impact on other developers’ ability to apply to get new projects started. Ultimately there is a queue, with 2012 and 2013 projects taking priority, including for grid connection. On the other hand, where a project’s FiT is revoked, that will mean a new developer with a new project could take its place.”

The backlog has put pressure on the industry from some quarters, with RTS PV warning of a possible backlash against solar from the public. In response to the rumours of impending drastic cuts to financial support for solar, Aoyama said that FiTs were not decided until March each year when the FiT panel convened to set the rate and that therefore no decisions had already been made.

“The data has not been collected yet, so it would not be possible to determine this. The panel meets and assesses the information collected over the previous year, so they work over a fairly short timeline, in the final month of the financial year.” 

Similarly, Aoyama said that there were no plans in place for the government to try and shift the emphasis of the market away from large-scale projects in favour of other particular sizes of generation facility.

The agency’s deputy director, Yasuhiro Goto, who PV Tech spoke to briefly, also confirmed that Japan’s experiments with grid-scale batteries are on track to go online next year. The battery trial will be used to integrate the variable output of renewables onto two regional electrical grids. 

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