Japan’s solar grid connection impasse starts to bite

Share on facebook
Share on twitter
Share on linkedin
Share on reddit
Share on email

Recent challenges to large-scale solar in Japan, including disputes over grid connection, appear to be having a tangible effect, with negative impacts reported this week by two major PV companies in their latest financial results.

Japanese thin-film manufacturer Solar Frontier and Norwegian developer, Scatec Solar, both said this week that the decision last year by five of Japan’s utility companies to stop considering large PV projects for connection approval had had damaging consequences.

Scatec Solar revealed in Q4 financial results yesterday that it had been forced to stop progress on a number of projects in Japan due to the utilities’ actions

In the report, Scatec said that policy uncertainty and the halt of applications for connection to the grid had prompted it to discontinue its Japanese development activities, thought to include a substantial pipeline of projects.

“The introduction of the utility moratorium on renewable energy in Japan has halted progress on projects in Scatec Solar pipeline in the country,” Scatec said.

“It is highly uncertain when and how the Japanese government will move forward with utility scale solar. This has led to a decision for Scatec Solar to discontinue further project development activities in Japan.”

Meanwhile, Solar Frontier, the vertically integrated Japanese CIGS specialist said in its own financial results out this week that there were enough delays to its customers’ projects in Japan that its module shipment volumes for the fourth quarter of 2014 were lower than in the previous year. However, domestic demand “remained robust”, the company said, and as has been the case for some time constituted around 90% of Solar Frontier’s total module sales.

Domestic concerns

The two companies’ observations echo the findings of an as-yet unpublished survey of Japan’s solar industry, conducted by the Japan Renewable Energy Foundation (JREF) advocacy group and revealed in the latest issue of PV Tech Power magazine published today.

Around 130 solar companies responded to the questionnaire, which the foundation hopes to publish before the end of the first quarter of this year.

In PV Tech Power's special report on the state of solar in Japan, JREF senior researcher Keiji Kimura reveals that around 60% of respondents said they were directly affected in a negative way by both the grid connection issue and measures introduced to resolve them, which include revisions to the rules governing Japan’s feed-in tariff.

In a saga that began in October with the suspension of new grid applications by southern Japanese power company Kyushu Electric, followed quickly by four others among Japan’s 10 utility companies, the solar industry and in particular large-scale PV, found itself in a difficult impasse. In Japan, each utility company has a regional monopoly that includes responsibility for the transmission and distribution infrastructure. The government, through its Ministry of Economy, Trade and Industry (METI) convened a “working group” to calculate available grid capacity. The utilities resumed their consideration of applications in late January after the working group ruled that over 50GW of capacity remains available in the five regions in question.

The grid connection issue has not been the only reason for this bottleneck of projects to form – dating from further back there have been various other issues, not least of all rising electricity prices and the burden placed on ordinary consumers to pay for the FiT as well as the generosity of the FiT itself, which has led to some accusations of profiteering.

It is mainly for these reasons that the government undertook a wide-ranging review of the FiT at the end of last year. Keiji Kimura said that according to respondents to JREF’s survey of developers and other stakeholders, the most serious of the aforementioned negative effects has been that companies have found it increasingly difficult to make business plans for the medium term future.

Read more about Japan's latest challenges and the domestic solar industry's outlook for the future in Volume 2 of PV Tech Power, available to read online now.

23 February 2022
Held annually since 2016, the Energy Storage Summit Europe is the place to be for senior stakeholders in the European storage industry. Designed to accelerate deployment of storage, we examine evolving chemistries, business models, project design, revenue stacks and use cases for storage. The 2022 edition will include exclusive content around longer duration solutions, energy strategies for wide-scale deployment of EVs and "EnTech", the event which sits at the intersection of digitisation, decentralisation and decarbonation of the power system. Come to meet TSOs, DSOs, Utilities, Developers, Investors and Lenders and leave with new contacts, partners and a wealth of information.
7 March 2022
Take your chance to join the most powerful platform in the MENA region. Middle East Energy (MEE), Intersolar, and ees, the leading energy exhibitions are joining hands to co-deliver an outstanding renewables and energy storage event at Middle East Energy 2021. Renewables and energy storage at MEE is the largest gathering of solar and renewable energy industry professionals in the Middle East & Africa, offering the most effective trade focused platform to international manufacturers and distributors looking to meet regional buyers.
8 March 2022
As Solar Finance & Investment enters its ninth year, we sit on the cusp of a new power market with solar at its heart. The 2022 edition of the event will build on our years of expertise and relationships to bring investors and lenders together with top developers. Connect with leaders in the field and use exclusive insights to drive investment and development decisions for the future. Meet new and existing project partners at the largest gathering of European solar investors and lenders.
23 March 2022
When it comes to storage, the US market exceeded a gigawatt of advanced energy storage installations (weighted towards lithium ion) at 1.46 GW, more than the previous six years in total! An exponential growth rate could see the market hit 7.5 GW p.a. by 2025. The summit will provide a wealth of content around this vital piece in the US power puzzle, with sessions dedicated to explore how companies are making money from batteries, the latest chemistries and their applications as they apply to different use-cases. We ask how investors can match ESG criteria to batteries and we will bring case studies of successful deployment and project execution onto the stage to examine how you can ensure your own projects are successful.
29 March 2022
Now in its 10th sell-out year, Large Scale Solar returns to Lisbon in 2022. We are excited to gather together face-to-face with the European solar industry as we provide unique and exclusive access to a powerful selection of the market's key stakeholders. Join this elite summit to find out how the market is maturing, which new markets are becoming more exciting, how technology is evolving and who's driving the market forward into the 2020s. Always senior, packed with developers, EPCs, utilities and investors this is the event for companies serious about European solar PV.
7 April 2022
Solarex Istanbul, Turkey’s first and unique exhibition on solar energy, provides a huge opportunity to Turkey on the way to being a solar energy hub. Solarex Istanbul will take place on 7-9 April 2022 for the 14th time. It will be a commercial platform to have the latest technologies and combination of new products from all around the world. It takes place annually at Istanbul Expo Center, Turkey. It is also called the most important platform for manufacturers, suppliers and dealers of the solar industry in Eurasia.

Read Next

January 27, 2022
Renewables owner and operator Brookfield Renewable has tripled its US development pipeline to 31GW through the US$650 million acquisition of clean power developer Urban Grid.
January 27, 2022
Hecate Energy’s first stage application for a 500MW solar PV plant in the state of New York has been accepted by the newly formed New York State Office of Renewable Energy Siting (ORES).
January 27, 2022
Italian asset manager Green Arrow Capital (GAC) has signed a framework agreement with Spanish solar company Progressum Energy Developments (PED) to acquire 508MW of ready-to-build solar PV projects in Spain in a deal worth over €400 million (US$446 million).
January 27, 2022
Tesla’s solar installations jumped 68% in 2021 to 345MW despite a slight dip in additions year-on-year during the fourth quarter.
January 27, 2022
Major European solar developers have called on the European Union (EU) to develop a PV supply chain strategy to avoid cost increases and disruption to projects, with the group calling for 20GW of manufacturing capacity by 2030.
PV Tech Premium
January 26, 2022
s solar finds itself deployed in further and more far flung climes, it is also having to operate in increasingly harsher climates. In this article, VDE Renewables assesses how such climates affect PV performance and what must be taken into consideration when formulating O&M strategies.

Subscribe to Newsletter

Upcoming Events

Solar Media Events
February 23, 2022
London, UK
Solar Media Events
March 8, 2022
London, UK
Solar Media Events
March 23, 2022
Austin, Texas, USA
Solar Media Events
March 29, 2022
Lisbon, Portugal
Solar Media Events
April 25, 2022
Berlin, Germany