A speech on “Solar Power Generation as a Main Power Source: Japanese Policy and Business Outlook” was delivered by the Ministry of Economy, Trade, and Industry (METI) on Feb. 28 during the PV Expo held in Tokyo on Feb. 27 through March 1.
Here’s key points highlighted by PV InfoLink:
The Japanese government continues to lower subsidies and focus more on the auction. Through expanding the scale of the auction, they hope to encourage more companies to invest in PV solar and join the competition. This way, the high PV generation cost can be reduced in Japan.
The Opinion from PV InfoLink :
For subsidies, since the FiT is lowered significantly for PV System of industrial and commercial sectors, the newly-added installation for this sector will be affected substantially. The market share of this type of project currently stood at 25%. With the lower subsidies for industrial and commercial sectors, the market share of residential PV will keep rising in Japan. Yet, the overall installation will shrink significantly after the unfinished projects from the previous are completed.
The auctioned capacity started to increase in 2019. Any systems with a scale of over 500kW will have to participate in the auction. Through the auction and lower FiT, Japan hopes to reduce the higher construction cost of PV plants. However, the three-rounds of auctions held in 2017-2018 still witnessed higher winning prices. Therefore, the construction cost still has to go down otherwise the effect of the new policy will be affected significantly.
Lastly, for the unfinished projects in 2012-2014, factors that are not conducive to installations exist in most of these projects and thus the number of projects that will actually be in construction will be limited. We asked about manufacturers’ opinions on the exhibition. Those that are more optimistic believe 50% of the projects can be completed, while those that are more pessimistic think only 10%-20% can start the construction. In addition, although the Japanese government indicated that these projects have to file application before late-September 2019 and complete grid-connection before late-September 2020, many details within each project still has to be adjusted. Overall, these unfinished projects can help to increase the Japanese market demand in 2019-2020 and compensate for the reduced newly-added installation of PV system for industrial and commercial sector caused by the lower subsidy.
Currently, the new policy is still under discussion in Japan. The speech in the meeting is just for reference. Japan is likely to announce the new policy before late-March 2019.
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