Japan to further cut solar power prices in FY2019

15 January 2019 Week 02 Issue 490

Japan’s Ministry of Economy, Trade and Industry (METI) has unveiled plans to further slash internationally high solar power prices in fiscal 2019, which starts on April 1, under a feed-in tariff (FIT) system.

The plans specifically call for lowering the price for electricity generated by companies at facilities with an output capacity of less than 0.5 MW to 14 yen (US$0.13) per kWh in fiscal 2019, down 22% from 18 yen (US$0.16) in fiscal 2018.

When the FIT system was launched in Japan, the solar power price was 40 yen (US$0.37) per kWh. The planned price in fiscal 2019 is about one-third of the initial price. METI plans to further lower the price to 8.5 yen (US$0.08) as early as fiscal 2022.

As part of efforts to reduce internationally high solar power prices, the METI plans, which were announced on January. 9, also call for expanding the current bidding system with a price ceiling.

The bidding system was introduced in fiscal 2017 for electricity generated by companies at facilities with an output capacity of 2 MW or more each. In fiscal 2019, it is to apply to electricity generated at facilities with an output capacity of 0.5 MW or more each.

Japan introduced the full-scale FIT scheme for solar and other renewable energy sources in July 2012 in the wake of the 2011 Fukushima nuclear disaster.

The FIT scheme requires electric power companies to purchase electricity produced by firms and households using solar power, wind power and other renewable energy sources at fixed rates for long periods.

In July 2018, the Japanese government formally adopted a new basic energy plan calling for, among other things, the promotion of renewables to make them a “main power source” in the future.

The new basic energy plan contains the Japanese government’s long-term energy mix plan.

The energy mix plan calls for generating 22-24% of the country’s electricity by renewable energy sources such as solar and wind power, 20-22% by nuclear power and 56% by thermal power in 2030.

 

Edited by

Richard Lockhart

Editor

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