Japan to hit solar peak of 14.3GW this year, finds BNEF

PV Magazine

Impending changes to the Japanese solar market will likely mean a peak for PV installations this year, finds report from Bloomberg New Energy Finance.

Following years of steady growth, 2016 will likely prove to be an apex year for Japan’s solar PV installations as impending changes to policy begin to suppress growth, finds a new report from Bloomberg New Energy Finance (BNEF).

The BNEF report expects Japan to add between 13.2 GW to 14.3 GW of new solar PV capacity this year, exceeding the estimated 12.3 GW installed in 2015 – a record. However, with challenges pertaining to grid connection, financing and available land mounting, installations in 2017 will likely fall away slightly to somewhere between 9.8 GW and 12.4 GW, BNEF believes, triggering a general downward trend.

It is widely expected that Japan will cut its generous feed-in tariff (FIT) on April 1 from the current rate of 27 yen ($0.24) per kilowatt hour (kWh) to 26 yen/kWh ($0.23/kWh) as Capex costs for large-scale solar plants continue to tumble.

“Because there have been challenges in grid connection, land acquisition, and securing financing for projects that could be subject to unlimited curtailment, the annual installed capacity will gradually decrease in 2017 and beyond,” said the BNEF report.

One of the key changes expected in the Japanese solar market is the introduction of solar auctions as Japan’s Ministry of Economy, Trade and Industry (METI) seeks to liberalize the country’s electricity markets.

The auction proposal is still to be approved by Japan’s National Diet (house of representative), with the law expected to come into force by April 2017. There have been reports that the auction could be limited to just 2 GW of new solar PV capacity annually, but Izumi Kaizuka of RTS Corporation told pv magazine that there is no foundation to reports that a 2 GW cap has been considered.

Source: PV Magazine. Reproduced with permission.