Japan Renewable Energy Feed In Tariff Structure Favors Solar Power Development

Solar power has emerged as a clear winner among its other three contemporaries, hydro, wind and geothermal energy.

Release Date: 13-Oct-2012



Japan has recently approved the feed in tariff structure for an enhanced development of its renewable sources of energy. Solar power has emerged as a clear winner among its other three contemporaries, hydro, wind and geothermal energy. The government has shown its resolve to develop the renewable energy sources with solar energy as the frontrunner, being the most abundant source in the country. After the shutdown of nuclear power plants all over the country and the power production decreasing significantly, Japan has had to increase its fossil fuel imports to make up for the lost power. But the country is now going the renewable energy way to produce power for which it will require huge investments to rapidly develop the infrastructure.

The recent change in policies and a new feed in tariff structure have again pointed towards a greater interest in solar energy development as opposed to wind or geothermal. Wind energy development has further been discouraged due to increasingly stringent environment impact assessment procedures. A new structure with minimum price rules are likely to encourage investments in the fledgling solar power generation sector helping the government reach its targets and also compensating for the closed down nuclear power generators in the public interest. The power generation from nuclear plants not happening anymore, it does pose a problem for the government and solar energy development certainly provides with the solution.

Under the new structure and scheme the electricity utilities will have to buy electricity generated from solar and wind power plants as part of their repertoire for selling power to the consumers. The utilities will have to pay a certain amount for the purchase of this power which will be given to the generators as an incentive for investing into the unconventional form of power generation. Solar power will be sold at JPY 42/ kWh or USD 0.5 and wind at JPY 23/ kWh or USD 0.29, a difference that tells how solar is being given preference over wind.

The new feed in tariff structure has given ample reasons to the companies and citizens to develop solar energy for power production at all levels from which they will be able to reap high monetary benefits. Feed in tariff is a mechanism being increasingly used by governments all over the world to enhance the investment in the renewable energy sector. Its relevance and main attraction is the long term contract that binds the government and the developing entity together for the development of the renewable source of energy. These long term contracts are based on the cost of the power generated.

The research report “Japan Solar Power Sector Analysis” details the other projects that the government has implemented and planned, apart from the new feed in tariff structure, to entice the companies, institutions and households to employ solar energy for power generation. There are subsidies provided on the modules which have resulted in a steady decrease in the prices of these modules, enabling more people to switch to solar power generation. The report is a comprehensive text detailing all the factors responsible for the current high growth of the solar industry in Japan while extrapolating these factors to show that the future of solar in Japan is indeed bright.

 

For detailed information visit “Japan Solar Power Market Analysis”.

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