Japan to install up to 7 GW in 2018 despite cancellation of 14.6 GW of approved capacity — report

The Ministry of Economy, Trade and Industry (METI) has revoked FIT approvals for 260,000 solar projects, totalling 14.6 GW of capacity, out of 84.5 GW of projects that had been approved under Japan’s old FIT scheme, said RTS Corp. in its latest monthly report.

However, the Tokyo-based PV consulting firm estimated that about 30 GW of PV capacity approved for development under the old program is still waiting to be commissioned.

RTS acknowledged that projects approved under Japan’s old FIT program would account for an unspecified portion of the capacity to be built in 2018. But it also said that the “recovery” of Japan’s residential solar market will account for a significant amount of this year’s installations, largely on the back of rising storage battery deployment and the growing importance of zero-energy home (ZEH) solutions.

In addition, the consultancy said it expects the government to ease requirements to participate in upcoming tenders, in response to relatively low interest in the country’s first PV auction.

Based on last year’s installations, Japan’s cumulative installed solar capacity likely sits just below 50 GW at present, up from nearly 42 GW at the end of 2016, according to statistics from the International Renewable Energy Agency (IRENA). In December, RTS said that the country appears on track to hit its 2030 solar installation target of 64 GW by as early as 2020.

RTS said it expects new PV project approvals to proceed “smoothly” under Japan’s revised FIT legislation. METI has approved 45.402 GW of solar for development under the new FIT program since April 2017. The planned projects are above 20 kW in size, across 274,979 locations.

“Various sectors will make further efforts for PV, including the national government, local governments, the electricity business, the PV-related business, the user industry, the financial industry,” RTS said, explaining that it still expects to see new business models emerge.

“Policies concerning renewable energy are shifting from a simple and quantitative expansion of introduction to a phase aiming to establish the next generation electricity network as an electric business.”

METI is now looking at ways to deal with grid restrictions, while promising to ensure greater transparency regarding curtailment, to help investors and developers assess the feasibility of potential projects.

It is also working with the Ministry of Environment (MoE) to set up a reserve fund to cover the future disposal of PV modules. In addition, the central government’s fifth strategic energy plan is now in development, with the potential for renewables to play a bigger role in the country’s targeted energy mix.