As 2030 and its targets for decarbonization loom, Japan is looking for ways to raise its commitment to renewable energy. For solar, already constrained by a shortage of suitable land to develop new projects, rooftops offer the best opportunity to rapidly build new generation capacity. And now both the central government and regional authorities in Japan are unveiling policies to support the installation of solar on the rooftops of homes and businesses throughout the country.
Japan is targeting a 46% reduction in greenhouse gas emissions by 2030, using 2013 emissions as a baseline. As part of that goal, the country has also set itself the target of having at least 36% to 38% renewables in its energy mix by the same deadline.
Speaking at a conference held during World Smart Energy Week in Tokyo, in March, Kazuya Inoue, director of climate change policy at Japan’s Ministry of Environment, noted that solar – with the shortest lead time of any renewable energy technology – will have the largest role to play in meeting the renewables target. “The Ministry of Environment is committed to solar,” he told the audience in Tokyo, adding that he sees benefits beyond decarbonization, with plans for new solar installations to create jobs and revitalize local economies across Japan.
There is, however, a long way to go to realize all of this. Inoue also noted in his speech that under current plans, meeting the 2030 targets will require a near-doubling of Japan’s total installed PV capacity, which stood just below 70 GW at the end of 2022. The policy director closed his speech by citing a study that showed Japan’s renewable energy potential amounts to 1.8 times expected demand up to 2050, and stated that “much, still, is not being done to exploit this potential.”
With a high feed-in-tariff (FIT) rate, Japan emerged, in the early 2000s, as a leader in solar energy and has since maintained installations of around 5 GW per year.
Today, though, land for these projects is scarce and solar is beginning to come into conflict with agriculture and other industries. In the longer term, combining solar and farmland into agrivoltaics projects should unlock some new sites but these applications are in the early stages, both in technical and regulatory terms, and unlikely to make a major market contribution before 2030. BIPV, tapped by many as a key technology to reduce renewable energy’s land use, is in a similar situation: Products are limited and Japan’s strict building codes and earthquake-safety requirements mean getting any PV product additionally approved for use as a building material will be a lengthy process. Floating PV has also seen some development but regulatory issues, as well as a few high-profile cases of systems being severely damaged by storms, mean this segment also faces teething problems.
That leaves rooftop PV among the most attractive options for further development of renewables in Japan and the government is responding with a series of new subsidies at central and regional level to further incentivize household solar. Central government, through the Ministry of Economy, Trade and Industry (METI), has set an increased FIT rate for rooftop PV installations larger than 10 kW, rising from JPY 10 ($0.075) to JPY 12 from October. Large rooftop installations (with at least 250 kW of generation capacity) have been exempted from the national tendering scheme. “Since appropriate locations for installing PV modules are now on the decline, METI set the offtake prices of commercial rooftop PV systems 20 to 30% higher than those of ground mounted PV systems and aims to enhance companies’ willingness to install commercial rooftop PV systems,” explains Izumi Kaizuka, director of research at Tokyo-based consultancy RTS Corp.
Japan solar feed-in tariffs by system type (JPY)
|FY2022||1st half FY 2023||2nd half FY 2023||FY2024|
|Less than 10 kW||17||16||16||16|
|10 kW up to 50 kW ground-mounted||11||10||10||10|
|50-250 kW ground-mounted||10||9.5||9.5||9.2|
|10 kW up to 50 kW rooftop||11||10||12||12|
|More than 50 kW rooftop||10||9.5||12||12|
Further legislation, introduced at the beginning of April, should serve to drive even more commercial PV installations. Revisions to Japan’s Energy Conservation Act now require companies with high energy consumption to regularly report their status and their medium and long-term plans for conversion to non-fossil fuel energy, and places 2030 targets on particular industries requiring reduction of fossil fuel consumption (see table below).
Industry targets for non-fossil fuel energy conversion
|Cement manufacturing||Ratio of non-fossil fuels in burning processes (kilns, etc.) 28%|
|Automobile manufacturing||Ratio of non-fossil fuel electricity to total electricity consumption: 59%|
|Chemical (petrochemistry/alkali)||Reduction of coal consumption by 30% compared to FY 2013|
|Paper manufacturing||Reduction of coal consumption by 30% compared to FY 2013|
|Steel (blast furnaces)||Reduction of coal consumption intensity per ton of crude steel by 2.0%, compared to FY 2013. Ratio of non-fossil fuel electricity to total electricity consumption: 59%|
Incentives for new solar installation are also appearing at regional level and are primarily focused on rooftop PV. Since 2020, the city of Kyoto has had requirements in place for new and renovated buildings with a floor space of larger than 2,000 m² to install solar panels. In December 2022, Tokyo took this a step further by extending the requirement to single-family homes and other smaller buildings as well. Also speaking at World Smart Energy Week, Kazumi Arai, system coordination manager for Tokyo Metropolitan Government (TMG) noted that while an estimated 70% of greenhouse gas emissions in Tokyo come from buildings, just 4.24% of the city’s rooftops currently have solar installed. “It’s time to act on climate and energy crises,” he told the audience.
In Tokyo, the new rule will place an obligation on large house builders – those with projects covering more than 20,000 m² per year – to add solar to new houses and other buildings with less than 2,000 m² floor space. These companies (RTS Corp. estimates around 50 businesses will be subject to the rule) will receive a quota based on the number of buildings and the sunshine conditions in each region. New large buildings, in addition, will face an obligation for the building owner to cover at least 5% of the building area with panels.
Having been passed by the Tokyo city government, the law is scheduled to come into force from April 2025, following a “period of support” for homebuilders and other stakeholders. TMG has also recently announced plans to spend JPY 740 billion on a “strong and sustainable Tokyo,” including JPY 150 billion to “promote the installation of renewable energy facilities on new buildings.” Other regions in Japan are widely expected to follow the capital’s lead with similar mandates for rooftop solar over the coming years.
With these FITs and other subsidies available, as well as rising electricity prices and an attractive power-purchase-agreement business model, new rooftop PV is expected to drive higher installation numbers across Japan. In its “business as usual” scenario, RTS Corp. expects the country’s annual PV installations to reach 8 GW in 2030, while an accelerated scenario could see them go as high as 14 GW.
The companies that supply Japan’s market are preparing for rising rooftop demand, with many offering packaged solutions that include modules, inverter, racking, and often a battery, to simplify the supply process. Michael Zhang, director for Japan at Sungrow, a Chinese inverter and energy storage supplier, says he expects to see a lot of companies taking up PV in the next few years. “Commercial PV is very attractive in Japan at the moment,” he tells pv magazine. “Subsidies are available and it’s easy to get approval for PV and storage as well.”
On the energy storage side, subsidies are available for residential and commercial batteries. RTS Corp says prices will need to fall further for uptake to grow, however. Discussing efforts to subsidize storage to the extent solar reaches cost parity with grid electricity, research director Kaizuka says the Ministry of Environment “and other municipalities, including Tokyo, provide a great amount of subsidy to attain storage parity but the impact is limited so far. It will take a few more years for energy storage to reach parity, since batteries are still expensive and the compatibility needs to be improved further.”
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