Japan will be adding a total of 8 GW to its solar photovoltaic installations in 2014, with just over 5.1 GW coming online in the second half of the year, driven by initiatives from the Ministry of Economy, Trade and Industry (METI), according to a report from U.K.-based consulting firm GlobalData.
The report says the growth follows a period of slow deployment for Japanese solar PV projects, which forced the METI to review the previous system of feed-in fariffs (FITs) and led to the implementation of a revised strategy.
"Previously, companies encountered delays in acquiring approvals from government authorities for constructing PV projects on agricultural land, aggravated by developers waiting for further cost reductions in components,’ says Ankit Mathur, GlobalData's project manager for alternative energy. ‘As a consequence, some developers neither finalized sites nor agreed on a contract for purchasing equipment for PV power plant construction.’
The GlobalData report explains that the METI moved to annul the FIT for projects that had failed to secure land and equipment by the end of March and to rescind any projects that had fulfilled only one of these requirements by the end of August. The METI also introduced a clause stating that any projects approved during this year must have a finalized site and equipment contract within 180 days.
‘These steps have created an immediate opportunity for module suppliers,’ Mathur says. ‘Although the installed cost of PV systems in Japan is generally higher than in other matured markets.’
Some of these expenses are due to an increase in the sales tax by 3% at the beginning of April, which placed the total levy on solar PV systems at 8%.
‘The Japanese PV market is gradually moving from residential to non-residential areas, attracting experienced global developers to set up large-scale PV systems in the country,’ Mathur says. ‘However, Japan's mountainous terrain and lack of connectivity between regional grids will continue to be obstacles to growth.’