Japan poised to top 8 GW solar installations this year

Pro-solar initiatives laid down by Japan’s Ministry of Economy, Trade and Industry (METI) will add more than 8 GW of solar PV capacity this year, according to research by consulting firm GlobalData.

In the company’s latest report, titled H1, 2014 Global Solar Market – Policy – The Be All and End All for the Growth of Solar Market, GlobalData argue that METI’s recent review of Japan’s feed-in tariff (FIT) led to a favorable revision of the country’s solar strategy – a revision that should see some 5.1 GW of PV capacity added in the second half of 2014.

GlobalData’s project manager for alternative energy Ankit Mathur remarked that previous delays companies encountered in acquiring licensing and construction approvals for PV developments have largely been eradicated by METI’s recent actions.

"Previously, these delays were also aggravated by developers waiting for further cost reductions in components," Mathur said. "As a consequence, some developers neither finalized sites nor agreed a contract for purchasing equipment for PV power plant construction."

Earlier this year, METI was moved to annul many FIT-granted projects that had previously been found to have purposefully held back development in the hope that component costs would fall, a move that has helped free-up pipelines. METI also introduced a clause that stated any projects approved in 2014 must have a finalized site and equipment contract within 180 days.

"These steps have created an immediate opportunity for module suppliers, although the installed cost of PV systems in Japan is generally higher than in other matured markets," added Mathur. "From April 1, 2014, sales tax rose by 3%, making the total tax levy on solar PV systems around 8%."

Japan’s solar landscape is not only growing but diversifying, concluded Mathur, pointing to an increase in the number of large-scale solar PV projects that have been completed in the country over the past few months. At the same time, the residential sector appears to be slowing. Future obstacles to growth could be "Japan’s mountainous terrain and lack of connectivity between regional grids," warns the analyst.