Japan: PV demand growing faster than expected; new FIT rates proposed

12. March 2013 | Applications & Installations, Global PV markets, Industry & Suppliers, Investor news, Markets & Trends, Top News | By:  Izumi Kaizuka

The Japanese photovoltaic market has significantly changed since the introduction of FITs last July. With domestic demand growing faster than expected, Japan's Government has proposed a FIT reduction of around 10%.

Japan solar photovoltaic project

Photovoltaic FITs in Japan are expected to sink by around 10%.

As expected, a committee of experts in Japan yesterday, March 11, proposed that photovoltaic tariffs should be cut by around 10% from April 1. As per general practice, the Ministry of Economy Trade and Industry (METI) will hold public hearings to discuss the proposal for around the next two weeks. The Minister of METI will then announce the tariff before the fiscal new year.

According to METI, almost 4 GW of PV projects have been approved under the FIT program from July to December 2012, which saw tariffs of 42 Yen/kWh (around US$0.44; €0.34) paid to projects. The newly proposed tariffs can be seen in the table below:


Capacity: 10 kW and over

Capacity: Below 10 kW

Electricity to be purchased

100% of generated electricity

Surplus electricity

FITs/kWh 2012

40 Yen + tax (42 Yen/kWh)

42 Yen/kWh

Proposed FITs/kWh 2013

36 Yen + tax (37.8 Yen/kWh)

38 Yen/kWh

Purchase period

20 years

10 years

Higher than expected demand

Domestic shipment volumes of PV cells and modules almost doubled in Japan in 2012 to 2.47 GW, up from 1.3 GW in 2011. As the amount of imported modules increased, the ratio of domestically-produced cells and modules accounted for 68.8% in 2012, down from 79.7% in 2011, which means products from overseas accounted for over 30%.

Although residential applications used to dominate the Japanese market, industrial, commercial and utility-scale applications are increasing. Indeed, while total shipment volume for the residential PV application grew by around 50% from 1.1 GW in 2011 to 1.6 GW in 2012, market share significantly decreased from 85.1% to 66.4%.

On the other hand, industrial and commercial applications almost quadrupled from 113 MW to 432 MW, and utility-scale PV applications increased seven times from 45.9 MW to 324 MW. These two market segments are becoming the second and the third pillar of the Japanese PV market following the residential segment.

Meanwhile, quarterly domestic shipments (production for domestic market + imports) of PV cells and modules between October and December 2012 exceeded 1 GW for the first time, reaching 1.003 GW, of which 341 MW were imports. This is attributed to low-priced products by overseas manufacturers and a growing domestic demand which exceeds the production capacity of domestic manufacturers.

Read the full article in the April edition of pv magazine.

Edited by Becky Beetz.

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