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Clean Power japanese solar feed in tariff rate yen

Published on April 26th, 2012 | by Zachary Shahan

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Japan Solar, Wind, & Geothermal Feed-in Tariffs Coming Soon (Potential Rates Unveiled)

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April 26th, 2012 by Zachary Shahan
 
japanese solar feed in tariff rate yen

Japan’s about to become the next major economy to implement a solar feed-in tariff, and from the looks of it, it’s going to be a generous one. (I can see a herd of solar companies migrating over to Japan now.) Wind and geothermal feed-in tariffs are also on their way to implementation.

Japan’s Solar Feed-in Tariff to Be Big

For solar, Reuters is quoting 42 yen (or about $0.52, €0.39, or £0.32) over the course of 20 years. That’s “roughly twice what is currently paid in Europe,” Craig Morris of Renewables International notes before asking: “Will Japan be the next boom and bust market?” (Note: it’s still less than the $0.55 Ontario is planning to pay.)

Japan has been a solar power leader before, but sitting on its previously large capacity of low-carbon nuclear, it held its horses as Europe steamed ahead with strong feed-in tariff programs. For anyone critical of such feed-in tariffs (i.e. the folks who stop by our site from time to time to try to spread the lie that it’s a failure), take notice of Japan’s decision now to follow suit after careful consideration and observation. It’s clear that it wants to boost solar on its citizens’ rooftops, and wind and geothermal power as well, at a blistering pace, and it knows that a feed-in tariff is a great way to do so (and also a great way to bring renewable energy costs down).

Japan Clean Energy Feed-in Tariffs: More Details

The 42 yen is in line with what the solar sector in Japan was pushing for, Reuters notes, and payments are likely to start on July 1.

In addition to presenting this solar feed-in tariff proposal, once finalized, to Trade Minister Yukio Edano, a 23.1 yen per kwh rate for wind power and 27.3 yen per kwh for geothermal power are also looking likely. The final rates, which are expected to be determined as early as Friday, would then need to be approved by Edano, “who is likely to make a final decision as early as end-May by also taking into account public opinion.”

More details from Reuters on rates of return for the three industries: “Ueta’s calculation based the pre-tax internal rate of return for solar power suppliers at 6 percent, for wind power suppliers with capacities of 20 kw or higher at 8 percent, and geothermal suppliers at 13 percent, the draft showed.” This offers a nice boost to companies in these industries.

Notably, it is clear that the policymakers don’t want to chip into utility company profits and intend to have the costs to be passed on to customers. “The law (mandating the tariff scheme) clearly states that for the first three years, we should pay special attention to profit (of the suppliers),” Kazuhiro Ueta, the head of the panel studying appropriate rates, told reporters.

“When you look at it from the viewpoint of households, this may be a burden through electricity costs. But to put it in other words, this is an investment to promote renewable energy. It is necessary to understand that this is a framework for promoting such energy.”

The feed-in tariff rates will be reviewed annually once implemented.

Sources: Renewables International & Reuters
Image: home made of Japanese yen and solar panels via Shutterstock

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spends most of his time here on CleanTechnica as the director/chief editor. Otherwise, he's probably enthusiastically fulfilling his duties as the director/editor of Solar Love, EV Obsession, Planetsave, or Bikocity. Zach is recognized globally as a solar energy, electric car, and wind energy expert. If you would like him to speak at a related conference or event, connect with him via social media. You can connect with Zach on any popular social networking site you like. Links to all of his main social media profiles are on ZacharyShahan.com.



  • Matt

    They are looking for a MASSIVE build out of PV, wind, and geothermal in the next 5 years and then will scale back.

    • http://cleantechnica.com/ Zachary Shahan

      Yeah, agreed. Looks clear that they will be reviewing the policies each year and seeing where they’re at.

  • rommel43

    Hopefully Japan will do this right and get a 100% green energy economy running so it can be held up as an example to all those twits in America

    • http://cleantechnica.com/ Zachary Shahan

      Hopefully, we’ve already got some pretty great examples in Europe that the U.S. ignores, but another one can’t hurt! :D

  • anne

    I agree with Craig Morris. When I saw the 42 yen per kWh FiT, my first thought was “are they barking mad?”

    Currently, in Europe the cost price for PV is below 15 eurocents per kWh. Somebody should tell these Japanese that the year is 2012, not 2002.

    • anderlan

      With most of the nuke fleet down for inspection and possible decommission, 50cents is probably only double the retail price of power anyway. And, they want to go nuclear, so to speak, on renewable buildout. This is the way to do it. It’ll get adjusted down soon enough, but for now, it’s a giant green light over Japan that solar firms can see from anywhere in the world.

      • http://cleantechnica.com/ Zachary Shahan

        agreed. they’ve got a ton of work to do.

        also, this isn’t a final rate yet — will see what happens in the next step.
        but yes, this is a huge green light to solar, wind, and geothermal companies. :D

        • john

          I’m in Japan and am considering taking advantage of the Fit and subsidies to install a small solar and hopefully wind system on my home. So I’m doing my homework and double checking the #’s. Just as a side, I can’t drive 3 minutes without seeing a full PV roof on a house round here. It seems every 20th house or so has PV. Thanks for the article.

          • http://cleantechnica.com/ Zachary Shahan

            Totally awesome! Man, I’d love to visit Japan right now.

      • Altair IV

        I live in Osaka, and my electricity cost currently appears to be just over ¥24/kWh (simple flat average, including consumption tax). Since last year this has also included a small surcharge for “solar power promotion”, whatever that means. For me it adds between ¥10-20/month.

        I’m keenly interested in seeing what happens when this FIT goes into effect. Just yesterday the TV news was talking about this, but I couldn’t quite understand what the “42 yen” thing was until I read this article. Everyone is currently going to great lengths to save electricity; even the automatic doors and restroom blow driers are turned off at one of my work locations. And while I haven’t seen much in the way of actual solar panels going up yet, there’s a lot of buzz about it, and I’ve seen several advertisements promoting home solar systems. If I didn’t live in a crummy little rental apartment, I’d have set up my own solar panels long ago.

        • http://cleantechnica.com/ Zachary Shahan

          Thanks for the note. Always interesting to hear from someone in a country where a policy is being implemented. Let us know how things develop if you can!

          • Altair IV

            I certainly intend to, when appropriate.

            Incidentally the electric cost has been rising, slowly but consistently. I just pulled out my bill from a year ago, and it looks like I’m now paying almost ¥1/kWh more than last year. The total amount paid is only less because I’ve made a big effort to reduce my electric use since then (I actually began my cost-cutting measures just before the earthquake). It will be really nice to see if this country sees the same kind of daytime leveling effect that Germany is seeing.

          • http://cleantechnica.com/ Zachary Shahan

            Yeah, that would be really interesting… & I imagine it will. Going from heavy nuclear to heavy renewable, it’s practically a given.

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