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Japanese Solar Energy Sector Fast Approaching Cost-Revenue Parity

Japan’s solar energy sector is fast approaching profitability, ahead of impending feed-in-tariff (FiT) cuts, according to the Japan Renewable Energy Foundation.

To be more specific here, the Japan Renewable Energy Foundation (JREF) is expecting cost-revenue parity to be reached, and profitability to be achieved, sometime earlier than the second half of 2015. Given that Japan’s Ministry of Economy, Trade, and Industry, will be cutting FiT rates by 16% in July, the prediction is especially worth noting.

Japan flag

According to the JREF, the trend towards these predictions is partly due to the supportive governmental policies that followed the Fukushima nuclear power plant disaster back in 2011 — policies which were intended to help the country move away from nuclear energy altogether. Since that disaster, the country has added an impressive 25 gigawatts (GW) of new renewable energy capacity — of this number, 80% was from solar energy projects. The industry has matured a great deal there, which helps with economies of scale and to bring down consumer acquisition costs.

“Solar has come of age in Japan and from now on will be replacing imported uranium and fossil fuels,” stated JREF executive board chairman Tomas Kaberger. “In trying to protect their fossil fuel and nuclear plants, Japan’s electric power companies can only delay developments here.”

Something worth nothing here in that regard: residential solar energy production costs have fallen by more than half in the country since 2010 — with the figure now sitting somewhere below 30 yen/kilowatt-hour (kWh), or about 24¢/kWh based on the current exchange rate. This means that solar energy is now very near residential electricity prices (average ones). The next year or so in the country should be interesting to observe as an outsider, big changes appear to be nearing.

Image Credit: Public Domain

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Written By

James Ayre's background is predominantly in geopolitics and history, but he has an obsessive interest in pretty much everything. After an early life spent in the Imperial Free City of Dortmund, James followed the river Ruhr to Cofbuokheim, where he attended the University of Astnide. And where he also briefly considered entering the coal mining business. He currently writes for a living, on a broad variety of subjects, ranging from science, to politics, to military history, to renewable energy.


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