Japan’s solar FIT to be announced this week

Japan’s new and generous feed-in tariff offers the world’s solar power developers a chance to profit in a stagnant market.

Its solar FIT, which could be adopted as early as this week, will be among the highest in the world, uncapped, and will be good for 20 years at systems larger than 10kW. The Japan Photovoltaic Energy Association has proposed a FIT of US$0.52 cents a kilowatt hour for 20 years.

FIT guarantees above-market rates for solar, wind, geothermal, biomass and hydroelectric power.

The prospect of a booming Japanese solar power market has led to intense excitement among global photovoltaic manufacturers and developers a time when Europe, the world leader in solar power, is languishing underneath massive economic woes.

Although system costs are very high in Japan because of the inflated yen, the FIT will still offer one of the highest internal rates of return in the global PV sector over the next few years.

Industry sources said Japan’s solar market should more double this year to 2.2 to 2.5GW before rising steadily to about 3.4GW by 2015.