Japan’s Renewables FiT Risks Delay, but Megasolar Plans Still Moving Ahead

Concern is mounting that Japan’s anticipated implementation of a feed-in tariff (FiT) to support renewable energy might not be ready for its original July timeframe, according to local reports.

At a March 6 meeting of the Ministry of Economy, Trade and Industry (METI), a five-member committee was asked to determine pricing for utilities to buy renewables by late April. Such clarity was hoped to have come much sooner, though, to give companies several months to get renewables projects ready. An April deadline “is already at least two months behind schedule,” says the Nikkei. (Here are an overview and more details of METI’s FiT proposal, which would be reviewed again in three years.)

Clarity on rates is a key issue. A higher price to utilities would simply be passed along as higher rates to consumers, making them shoulder the burden; lower purchase prices, though, would hurt the plants’ profits. Also at issue is how to set rates depending on renewable source: the Japan Wind Power Association wants at least 20 years of ¥20/kilowatt-hour (kWh) for land-based turbine-generated energy, while the solar sector wants at least ¥35/kWh. METI already decreed that rates for surplus solar power from April-June would be unchanged at ¥42/kWh for residential installations smaller than 10 kW in size, and ¥40/kWh for nonresidential installations bigger than that.

Moreover, those rates will help projects get much needed backing. “If the most important matter of setting purchase conditions is not accomplished, it’s difficult for us to borrow from financial institutions or conduct negotiations to seek partners for joint ventures,” said an official at West Holdings, quoted by the Nikkei. The paper declares that “a delay in the program would throw a monkey wrench into the plans of firms that have already started the ball rolling,” and warns that “a major setback may cause companies taking a wait-and-see stance to lose interest.”

Despite the anxiety over the July FiT deadline, renewable energy projects continue to press ahead in Japan. Softbank, whose megasolar plans had been cast in doubt after recent criticism and lukewarm support, has signed a memorandum-of-understanding with Mitsui on a 30-megawatt (MW) solar plant in Yonagao, Tottori Prefecture to start in 2013, and is reiterating its commitment to several smaller plants (2-4 MW) with help from Kyocera and Sharp. Railway firm Kintetsu also is said to be pushing on a project to install 20 MW of solar energy generation along its properties.

Meanwhile, the government is making it easier for large-scale solar power plants to get underway, by exempting solar power stations from a factory location act. The change, approved by a METI advisory body, means plants with proposed site areas bigger than 9,000 square meters won’t have to provide a 90-day notice to municipal governments before they start construction, nor would they be mandated to reserve 25 percent of the plant’s footprint for “green spaces” or “environmentally friendly facilities.” The thinking is that solar power plants should be exempt from such rules by their very nature, because of their minimized impact on the environment.

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Jim is Contributing Editor for RenewableEnergyWorld.com, covering the solar and wind beats. He previously was associate editor for Solid State Technology and Photovoltaics World, and has covered semiconductor manufacturing and related industries, renewable energy and industrial lasers since 2003. His work has earned both internal awards and an Azbee Award from the American Society of Business Press Editors. Jim has 17 years of experience in producing websites and e-Newsletters in various technology markets.

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