The World's #1 Renewable Energy Network for News, Information, and Companies.

Japan Recommends Cutting Solar Tariff as Equipment Prices Fall

Japan Recommends Cutting Solar Tariff as Equipment Prices Fall

Japan's solar developers would get 10 percent less for the power they feed to utilities under a recommendation a government panel made after taking into account a plunge in the cost of panels.

The committee of experts advising the Ministry of Economy, Trade and Industry today said the rate should be cut to 37.8 yen (39 cents) per kilowatt hour for 20 years for applications from April 1. The current rate is 42 yen. The government must endorse the proposal before it comes into force.

The cost of solar equipment has fallen so much that officials say incentives can be cut without squeezing development plans amid a push to diversify sources of energy after the nuclear meltdown in Fukushima. Even at the reduced rates, Japan’s support for solar is about three times the incentives offered in Germany and China, two countries that are among the biggest solar markets in the world.

Japan’s introduction of a 42 yen solar tariff in July enticed panel makers such as Kyocera Corp. to begin building solar stations and encouraged new entrants such as Softbank Corp., a mobile-phone provider, to develop solar factories.

Japan could cut the incentive as much as 12 percent to 37 yen and still have an incentive for developers to build new plants, Bloomberg New Energy Finance estimated in January.

Average System Cost

The average system cost for non-residential solar has fallen 14 percent to 280,000 yen per kilowatt since October compared with the amount used by the committee to set the solar tariff for the year ending March 31, according to the ministry.

Prices for silicon-based solar panels sank about 20 percent in the past 12 months, according to data compiled by Bloomberg.

Solar capacity rose 29 percent in Japan from April to November as developers added 1,398 megawatts of installations to a base of 4,800 megawatts, according to trade ministry data.

The group today recommended keeping tariffs at current levels for the four other types of renewable sources covered by the program, saying it lacked enough examples of new projects to review pricing.

For geothermal, the panel suggested 27.3 yen per kilowatt hour for plants with capacity of 15,000 kilowatts or larger, and 42 yen for smaller plants, both for 15 years. The wind tariff was recommended to remain at 23.1 yen per kilowatt hour for 20 years.

The government panel also recommended keeping the tariff for small hydro at 25.2 yen to 35.7 yen per kilowatt hour for 20 years depending on plant size. For biomass, tariffs of 13.65 yen to 40.95 yen per kilowatt hour for 20 years were proposed, depending on type of fuel used.

The panel is led by Kazuhiro Ueta, professor of environmental economics at Kyoto University. Toshimitsu Motegi, Japan’s minister of economy, trade and industry, must approve the recommendation before it comes into force.

Copyright 2013 Bloomberg

Lead image: Price report via Shutterstock

RELATED ARTICLES

Gavel

Three Chinese Solar Panel Groups Lose Exemption From EU Tariffs

Jonathan Stearns, Bloomberg

The European Union applied tariffs on three groups of Chinese solar-panel makers that have been exempted from the levies, potentially reviving tensions in the EU’s biggest trade case of its kind.

Stock graph

Green Bonds Sprout as Wall Street Embraces Renewable Energy Debt

Cordell Eddings, Bloomberg Bonds backing clean energy and other sustainable initiatives are booming. Investors are snapping up green bonds at the fastest pace on record, as big banks like Morgan Stanley and Bank of America Corp. pile in with new iss...
Loss and profit binders

Yingli May Return to Profitability in Second Half, CFO Says

Justin Doom, Bloomberg

Yingli Green Energy Holding Co., a Chinese solar manufacturer that hasn’t reported income in almost four years, may return to profitability in the second half, the chief financial officer said.

Students and solar powered cars with energy storage

Rain or Shine, Students Keep Their Solar Race Cars Going with Energy Storage

Wayne Hicks, NREL Teegan and Kira Cordova love the original Star Trek TV series. That much is obvious. The eighth-grade twins from Ken Caryl Middle School in Littleton are wearing the uniform tunics from the 1960s show — Teegan's in red and...

CURRENT MAGAZINE ISSUE

Volume 18, Issue 3
1505REW_C11

STAY CONNECTED

To register for our free
e-Newsletters, subscribe today:

FEATURED PARTNERS



EVENTS

PV-301: Advanced PV Design & Installation

This highly desirable and advanced course is intended for the profession...

PV-401: Advanced Field Training

Real world on the job solar installation, training, and experience is th...

PV-201: Introduction to PV Design & Installation

PV 201 Introduction to PV Design & Installation is simply the best i...

COMPANY BLOGS

Community Solar Solutions Appeal to Eco-Conscious Millennials

Tech savvy and convenience oriented, the millennial generation is the mo...

Building Rapport

How do you build rapport with your prospect? This is a question that I a...

Up to Bat – Why More Solar Companies Are Thinking Seriously About A...

Given the growth of the solar industry in the U.S., with 2014 year-...

SOCIAL ACTIVITY

Tweet the Editors! @megcichon @jennrunyon

NEWSLETTERS

Renewable Energy: Subscribe Now

Solar Energy: Subscribe Now

Wind Energy: Subscribe Now

Geothermal Energy: Subscribe Now

Bioenergy: Subscribe Now  

 

FEATURED PARTNERS