Japan: 51-cent FIT mooted

23. April 2012 | Markets & Trends, Global PV markets | By:  Jonathan Gifford

The Nikkei business daily has reported that a feed in tariff (FIT) of 42 yen (US$0.51) per kilowatt-hour (/kWh) is likely to be recommended by the panel established to advise the Japanese government on the matter. The rate is double the retail rate of electricity – close to what the solar industry itself recommended.

A pciture from the PV Expo, Japan.

The long-awaited revamped FIT could see PV development take off in Japan.

Post-Fukushima Japan has been reevaluating its energy policy and with all but one nuclear reactor temporarily shut down over safety concerns, electricity supply has been struggling to keep up with demand.

Renewable energy has received a major boost because of this and the FITs for renewables have been revamped. In what has been a reasonably slow process, a panel was formed to advise what level of FIT should be paid for photovoltaics, and there was much wrangling over to the panel’s composition.

Today's report of the FIT levels seem to confirm that attempts to "stack" the panel with pro-nuclear supporters have been unsuccessful. The report of US$0.50 /kWh is almost the level recommended by the Japanese photovoltaic industry. According to Nikkei, utilities will be required to purchase photovoltaic-generated electricity at this rate, under a 20-year contract. The FITs will begin on July 1.

A number of large-scale – or "mega projects" – have been announced over the past months, however many were proposed under the condition that the FIT levels were adequate. There were reports from Bloomberg that communications pioneers Softbank plan to build a 200 megawatt (MW) photovoltaic-power plant on the northern island of Hokkaido.

Even without the FIT, the photovoltaic module market has been growing in Japan of late. Recent Japanese Photovoltaic Energy Association (JPEA) figures have shown that in the first three quarters of one gigawatt (GW) of modules were supplied to the domestic market. While estimates vary, newly installed capacity is expected to reach two GW in 2012.

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