Japan to become 2nd largest solar market with new FiT

Japan's latest feed-in tariff has the potential to generate US$30 billion by 2016 for the local economy.

The scheme requires Japanese utilities to buy electricity from renewable sources at a rate of ¥42 for systems of 10kW or more for up to 20 years. This is double the tariff offered in Germany and more than three times that paid in China, reports Reuters.

“The tariff is very attractive,” said Mina Sekiguchi, associate partner and head of energy and infrastructure at KPMG in Japan. “The rate reflects the government’s intention to set up many solar power stations very quickly.”

Independent research brokerage CLSA Asia-Pacific anticipates solar capacity in Japan will total approximately 19GW by 2016, alongside the government’s more optimistic 22GW by the end of March next year.

With European subsidies being cut, Japan could fill the void and become the world’s second-largest market for solar power generation.

“We no longer have enough electricity, especially during the day, and that is when solar power can help,” said Mikio Katayama, chairman of the electronics manufacturer Sharp Corp. and the Japan Photovoltaic Energy Association.

“This is a very good rate to promote investment and mega solars.”

 "The high purchasing price under the feed-in-tariff system is great news for us," said Kazuhiko Katano, an official in Odawara's Energy Promotion Division. "The higher the price, the faster the penetration of panels will be."

According to Bloomberg, Japan ranked sixth worldwide with 1.3GW of new installations last year, bringing its installed capacity to 5GW. Next year builders will erect roughly triple that level, or another 3.2GW to 4.7GW, New Energy Finance forecasts.

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