Japan: 51-cent FIT announced

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In an announcement that confirms the country’s move towards renewables – as reported by Japanese dailies, the Nikkei and the Japan Times – the generous FITs could set the stage for a solar boom.

Japanese thin film manufacturer Solar Frontier told pv magazine that while the Ministry of Economy, Trade and Industry (METI) themselves had not confirmed the FITs, they augur well. "The numbers mentioned in the Nikkei would confirm significant support for solar energy in Japan," said Peter Rolufs, the general manager of marketing and communications for the company.

Nikkei reports that the final rates are expected to be confirmed on Friday, with the new FIT coming into effect on July 1.

With a domestic market that is expected to rapidly expand under the FIT, predictions range for a newly installed capacity of between 1.5 and two gigawatts (GW) for 2012. This may provide a considerable boost the domestic photovoltaic industry. "Japan’s turn in the solar spotlight, is also advantageous to Solar Frontier as a Japanese company manufacturing its modules 100 percent in Japan," said Rolufs.

The FIT announcement comes at a time when electricity supply is very much in the spotlight in post-Fukushima Japan. With the country’s last nuclear reactor to be temporarily shut down on May 5, major newspaper the Asahi Shimbun has reported that opposition to the restarting of reactors in some areas is growing.

With the hot summer months approaching the southern areas of Japan – which will result in increased demand for electricity as air-conditions are switched on – the Asahi Shimbun has also reported that three major utilities have warned of a 16.3 percent shortfall of electricity supply, in times of peak demand.

The President of telecommunications company Softbank, Masayoshi Son, has also used the announcement to make calls for increased deregulation in the electricity market. Son was reported by Nikkei as saying today that the distribution and generation functions of Japan’s utilities need be separated to facilitate true market competition.

In the report Son was quoted as saying that grid connection is twice as expensive in Japan as it is in other industrial countries. The entrepreneur was instrumental in the deregulation of Japan’s telecommunications industry.

Renewable revolution

"Japan is not simply introducing one of the world’s most advanced FITs, there is also a power crisis underway and along with that, massive urgency to ramp-up renewables," Andrew DeWit, a Professor of the Political Economy of Public Finance, at Rikkyo University told pv magazine. He added that a political transformation is underway, towards greater decentralization, that is facilitating the energy revolution kicked off with the FITs.

Dewit continued that now the FIT has been announced, photovoltaic and renewable projects will emerge at increasing speed: "The banks here, small and medium sized business sector, everybody is totally hungry [for renewable projects]."