Japan’s Solar FIT Cuts -An Attempt to Contain Cost of the FIT Program

Japan’s Solar FIT Cuts -An Attempt to Contain Cost of the FIT Program

Summary

Japan intends to increase the share of solar PV in its electricity generation mix, but is facing several challenges in the development of its domestic solar PV industry. First and foremost, the costs of system installation and generation are still too high. Generation cost of solar PV in Japan is higher comparing international benchmark. Grid constraints and land availability are the other factors expected to be responsible for a slowdown in the country’s solar PV market in the medium-term.

Though commercial installations are driving the market, solar PV capacity addition by utility-scale and large commercial installations started to fall in 2016 and continue to decline as existing approved projects are being delayed and fewer new projects are getting approvals. This trend will be further supported by the proposed FIT cuts for projects with implementation delays. Realization rate for approved projects is a major problem; it is only around 20% for utility-scale systems. The main reasons for low realization rate are non-mandatory time frame for project completion and insecurity about the future of the FIT system.

Scope

- An overview of Japan’s solar feed-in tariff (FIT) cuts.
- Detailed overview of the country’s solar PV market and auctions conducted by the government.

Reasons to buy

- Gain insight into Japan’s solar FIT cuts
- Understand the country’s solar PV market.
- Facilitate decision-making based on Japan’s solar PV market scenario.