Unbuilt PV projects in Japan could have FIT certification withdrawn

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Approved PV projects in Japan that are yet to be connected to the grid are being investigated by METI to determine what the delay is – with tough sanctions being considered for those projects found to be stalling deliberately.

METI launched its investigation in late September to ascertain why only one-in-ten PV projects of 400 kW or more have been connected to Japan’s grid. Their fact-finding mission is expected to run until October 18, during which time no official announcement from METI will be made, nor will any punitive action be taken.

pv magazine has learned that METI is concerned that some solar developers are deliberately delaying their projects in the hope that module prices will fall, thus delivering improved profit margins. However, METI cannot be sure that this is always the case (delivery times for some equipment varies throughout Japan, so there may well be legitimate reasons why grid connection has been slow), so have commenced an investigation in order to glean accurate first-party feedback, RTS Corporation’s Izumi Kaizuka said by telephone from Tokyo.

"Before December 10, 2012, projects could often be approved without developers securing or fulfilling land lease agreements," said Kaizuka, adding that METI’s investigation will carry out stringent checks to ensure developers can prove land ownership or an agreed land lease.

FIT for punishment

The proposed sanctions for non-compliance with the investigation could include a fine or the cancellation of FIT certification. Kaizuka stressed, however, that METI will follow a seven-step plan before taking any action.

Step one is to ask developers to report the status of their operation. For step two, METI will enquire about each developer’s willingness to give up their project without further sanctions.

If the developer refuses to do so, they then must fulfil steps three, four and five: confirm when construction began; provide documents that prove components have been ordered, and provide proof of land purchase/leasing. If steps four and five cannot be satisfied, then the developer has to schedule a date for when these documents can be provided (step six), and provide a valid reason for the delay, such as financing or grid connection negotiations (step seven).

If a developer refuses to comply at any stage, stated Kaizuka, then METI could issue a fine of up to JPY 300,000 (approximately $3,100). METI would not directly force developers to cancel their projects, but they would consider revoking the project’s FIT certification if the developer was thought to be behaving mendaciously.

Kaizuka added that METI believes that while it is possible many PV developers have simply run into financial difficulties or lack the required paperwork to see their projects through to completion, a proportion are in fact deliberately stalling in the hope that module costs will fall further.

The full outcome of the survey is not expected until later this month, after which point METI are likely to issue an official announcement detailing their findings and further – if any – actions.