Japan: New FiT Gives a Boost to Solar Market

Japan: New FiT Gives a Boost to Solar Market

All nuclear plants in Japan have been shut down for routine maintenance but the restart of most of the plants is uncertain— due to widespread objection in the wake of the Fukushima Daiichi nuclear plant accident.

Nuclear advocates warn that the first summer in over 40 years with little nuclear power will require significant energy saving especially in the Kansai, Kyusyu and Hokkaido districts. However, according to a recent Reuters poll, 75 percent of Japanese firms support abandoning nuclear power, given alternative energy resources to be secured.

To facilitate renewable energy development and make it an important power resource, the Japan government will begin a new feed-in tariff (FiT) scheme  on July 1, 2012. The bill, currently posted for public comments until June 1, will  offer attractive returns (42 yen/kWh for solar power including sales tax. See the table below for the details of the proposed rates and duration). The bill could lead a surge of solar power projects in the nation. Bloomberg New Energy Finance foresees strong growth of Japan’s renewable market, specifically for solar PV. The firm projects over 10 GW of new solar installed by 2014, making Japan  the third-largest solar market in the world. Japan was the fifth largest market, accounting  for about five percent of the 24 GW total installed capacities last year.

Proposed Feed-in Tariff Rates (including 5% tax)
Renewable Source


≥ 10 kW

42.00 (0.53)

20 years

< 10 kW

42.00 (0.53)

10 years


≥ 20 kW

23.10 (0.29)

20 years

< 20 kW

57.75 (0.72)

20 years


< 30 MW

25.20 (0.32)

20 years

< 1 MW

30.45 (0.38)

20 years

< 200 kW

35.70 (0.45)

20 years


≥ 15 MW

27.30 (0.34)

15 years

< 15 MW

42.00 (0.53)

15 years



13.65 to 40.95
(0.17 to 0.51)

20 years

* US$ based on 1 dollar = 80 yen exchange rate.

** Feed-in tariff rate for biomass varies depend on the biomass sources.

Ten regional power companies in Japan operate 14 mega solar plants with 65 MW capacity in total (as of February 2012) and they plan to add 11 plants by FY2014 to expand the total capacity to 106.3 MW. Local governments also play a key role in aggressively attracting projects to their regions. According to Kankyo Business Online (www.kankyo-business.jp), as of February 21, 11 prefectures and cities have announced available sites for lease with good grid connectivity.

Kankyo Business Online lists more than 40 ongoing mega solar projects throughout Japan including a 30 MW project in Hokkaido prefecture and a 30 to 40 MW project in Hyogo prefecture— both by Eurus Energy, a joint venture of Toyota Tsusho (a trading company in Toyota Motor group) and Tokyo Electric Power Company, which plans to start operations in FY2013. In addition, a 50 MW project in Aichi prefecture is planned by Mitsui Chemical, Toshiba, Mitsui & Co., Toagosei, Toray and Mitsui Engineering & Shipbuilding  for September 2013, and a 70MW project in Kagoshima prefecture is planned by Kyocera, IHI and Mizuho Corporate Bank that will start construction in July 2012.

According to Kyodo News “Canadian Solar Inc., the world’s fifth-largest maker of solar modules, plans to build a plant in Japan with a 150 MW annual production capacity as soon as fiscal 2013 to become the first foreign company to produce solar panels here, company sources said.”  The company expects increase in demands spurred by the new FiT scheme. The company also plans to build a 2 MW solar plant in Mie prefecture jointly with Hakuto, a SEMI member company, by March 2013.

Canadian Solar is not the only player in the solar industry outside Japan who is  jumping into this promising market. Suntech Power, the world’s largest solar panel manufacturer, will reinvest in their module assembling facility in Japan to convert it by July this year as a technical support center to strengthen its customer support capability.

Yingli Green Energy, a Hebei-based panel manufacturer, established a fully-owned Japanese subsidiary recently. Liansheng Miao, chairman and CEO of the company,  said, "Japan is an important PV market for us. With the establishment of the Japanese subsidiary, we expect to be closer to our customers and penetrate deeper into this market." Other players that recently expanded their activities in Japan include California-based SunEdison, Jiangsu-based wafer supplier Hareon Solar Technology,  and Shanghai-based module supplier Chaori Solar Energy Science & Technology, to name a few.

On the other hand, Japanese solar players such as Sharp, Kyocera, Mitsubishi and Panasonic, will also leverage the new FiT scheme to expand their business with more focus on high-performance panels with maximum power generation efficiencies that will call for innovative technologies and materials from suppliers around the world.

PVJapanIf you want to learn more about and establish and deepen your connection to the promising solar market in Japan, participate in the flagship solar event in the nation, PVJapan,  jointly organized by SEMI and Japan Photovoltaic Energy Association (JPEA)— where all tier one Japanese panel manufacturers exhibit along with key global players and equipment and materials suppliers. Last year’s event was sponsored by Eco Holdings, Xsol, LDK, Tokyo Electron, Canadian Solar, CIC, Kaneka, Mitsubishi, Panasonic, Solar Frontier, Toshiba, West Holdings, Applied Materials, Ferro Tec, Kyocera, Q-Cells, Sharp, Suntech, Ulvac, and Upsolar. For more information and application, please visit www.pvjapan.org/en.


 June 5, 2012