Japan’s Ministry of Economy, Trade, and Industry (METI) set a new FIT rate for the country’s C&I solar sector on March 22. From April 1, the FIT will be cut for the seventh consecutive year, this time by 22% to JPY 14/kWh ($0.13/kWh), for installations between 10 kW and 500 kW. The new rate is one-third of the level that was offered when the program started in 2012. The FIT regime for Japan’s residential PV sector, or systems smaller than 10kW, will be left unchanged at JPY 24-26/kWh, depending on the region.
In another step to bring down subsidies for solar, Japan has launched an open bidding process with a rate ceiling for installations larger than 2 MW. For fiscal 2019, this will be applicable to installations larger than 500 kW.
Analysts at Taiwan-based EnergyTrend have provided some perspective on FIT developments for other sources of renewable energy, which have been largely left unchanged. The FIT for onshore wind power, for example, decreased from JPY 20/kWh to JPY 19/kWh. The rates for offshore wind, geothermal and biomass were not revised.
Meanwhile, METI has also revealed that power prices in Japan will slightly increase to JPY 2.95/kWh. In 2019 this will translate to a power bill of JPY 9,204 (JPY 767 per month) for the average household with a consumption level of 260 kWh.
“The consecutive cuts… (have) put a damper on share prices of Japanese PV power firms and posed a great threat to the operations of such enterprises,” EnergyTrend said. “The number of corporate bankruptcies in the field increased, for the fifth straight year, by 8% to 95 in fiscal 2018, a record high.”