Japan: New PV FITS to prompt 3.2 GW installation growth

According to Bloomberg New Energy Finance, this growth is expected on the back of Japan’s announcement yesterday that it has approved its new renewable energy incentives.

Reuters further reported that Japanese Industry Minister, Yukio Edano sanctioned the introduction of the new feed-in tariffs (FIT). It wrote, "The move could expand revenue from renewable generation and related equipment to more than $30 billion by 2016, brokerage CLSA estimates."

It added that the new FIT scheme makes it compulsory for Japanese utilities to purchase electricity from renewable sources at pre-set premiums for up to 20 years. The price for solar-generated electricity, it continued, will be 42 yen ($0.53) per kWh, which is said to be triple what industrial users pay for conventional power.

At this year’s Intersolar Europe, Kyocera Fineceramics GmbH managing director, Rafael Schröer stated that Japan is likely to see around three GW installed in 2012, with the same figure being reached in 2013.

Japanese CI(G)S producer Solar Frontier is a little more conservative in its outlook for 2012, telling pv magazine that it expects around 2.5 GW to realized. The company – which is currently running at around 600 megawatt (MW) of a fully-ramped 900 MW capacity – expects 60 percent of this capacity to supply the domestic market.

Solar Frontier Vice President Brooks Herring told pv magazine that the growth in the Japanese market will be in the ground-mounted, utility-scale segment. "We see about one GW of residential photovoltaics in 2012, increasing somewhat in 2013. A lot of the growth that you’ll see from year-to-year is going to be in the commercial rooftop in the ‘mega solar’ sector."

Finding land for large-scale installations and also negotiating Japan’s notorious bureaucracy will also be a challenge to see “mega projects” realized. Solar Frontier reported that it is working with the Japanese PV-industry association JPEA and also independently, to cut through some of the red tape. "We think that we have a good group of people that can actually help developers fast-track through the process of getting a project permitted, constructed and grid connected."

Solar Frontier entered into a JV with German integrator and EPC Belectric, PV CIStems, earlier this year, and it is expected to become active in Japan, now that the tariff levels are confirmed.

Since the Fukushima disaster last year, Japan has steadily moved away from nuclear power. At the start of May, it was announced that the last of the country’s 50 nuclear reactors had been shutdown.

The new FIT will come into play on July 1.