Japan’s new feed-in tariff, implementation is anticipated to be July, is set to generate highly attractive returns, according to clean energy market research provider, Bloomberg Energy Finance. As long as the proposed scheme is able to off-set the expensive price of solar, it could lead to a surge in project proposals.
Solar Frontier, who has rapidly become the first serious competitor to First Solar in the thin-film PV sector, will be taking advantage of this new chapter for Japanese energy generation. Last month Showa Shell had highlighted that increased demand is expected for Japan; as a result Solar Frontier had said it would be increasing its sales network in the country. It has now signed a memorandum of understanding with Japan Asia Group.
Solar Frontier plans to provide products and services including consultation on project planning, CIS solar modules supply, and sourcing of balance-of-systems equipment for JAG on projects it is handling that total over 100MW, which is enough to power 30,000 Japanese households.
Bloomberg New Energy Finance has estimated that under Japan’s proposed tariffs, solar and wind projects could achieve equity returns as high as 44% and 51%, respectively, with total investments reaching up to US$37.5bn over the next three years. The market research firm predicts over 10GW of new solar projects installed by 2014, requiring investments of $12.5bn/yr over the next three years. Bloomberg New Energy Finance states Japan could become the third largest solar market in the world by 2014.
Yugo Nakamura, head of Japan research at Bloomberg New Energy Finance, said: “The government faces the challenge of picking the best rate for stimulating renewable energy investment while not over-paying for clean power. With the very high rates which have been proposed there is a very real risk that Japan will experience the same boom-bust cycles we’ve seen in other countries.”
Milo Sjardin, head of Asia at Bloomberg New Energy Finance commented: “The feed-in-tariff scheme has the potential to significantly alter Japan’s energy future. The country may build enough distributed solar capacity over the next three years to equal the electricity output from almost three nuclear power stations, and do so in a fraction of the development time. To enable further renewable deployment beyond that, the country will likely have to liberalise its power sector.”