Solar Energy System Approvals Surge Following Launch of Japan’s Renewable Energy Feed-in Tariff

Approvals for new solar and renewable power capacity in Japan look set to exceed a projected fiscal 2013 total of 2,500 megawatts (MW). They’re on pace to do so by the end of 2012 as opposed to end of March, 2013 (the conventional fiscal year-end for Japanese government and business), however.

The Japanese Ministry of Economy, Trade and Industry (METI) announced it has approved a higher than expected 725 MW of non-residential solar photovoltaic (PV) systems alone in the two months ending in August, according to a Denki Shimbun report.

Enactment of a higher than expected government solar energy feed-in tariff rate of 42 yen ($0.525) per kilowatt-hour (kWh) in July has prompted a surge in solar PV systems permit applications at METI. METI had approved new renewable power capacity of 1,300 MW as of the end of August.

Besides approving a total 725 MW of non-residential solar PV systems in the first two months to end August — the first two months the feed-in tariff was in effect — METI also approved 306 MW of residential solar PV systems. In addition to the solar approvals, 262 MW of new wind power installations, 1 MW of small- and medium-scale hydropower systems, and 6 MW of biomass power systems were approved, according to Denki Shimbun’s report.

Japan’s Feed-in Tariff Leads to Solar Power Surge

METI’s non-residential solar PV systems approvals have surpassed an initially projected 500 MW fiscal year total in just two months following the introduction of the national renewable energy feed-in tariff. New large-scale, non-residential solar PV systems approvals accounted for some 80% of the 725 MW of total new solar PV approvals METI has made in the first two months of the feed-in tariff.

The unexpectedly high solar feed-in tariff rate means manufacturers “can earn more money as they produce more modules,” an industry source told Denki Shimbun. It has also prompted Japanese banks to aggressively pursue financing opportunities.

Indicative of the surging interest and investment in Japan’s renewable energy market, Softbank, Japan’s third-largest mobile phone company announced plans to build a massive wind farm in northern Japan that would make it the country’s largest provider of wind power. The planned 500-wind turbine facility on Hokkaido island is to produce as 1 gigawatt (GW) or clean renewable power, according to a Bloomberg News report. Softbank and Mitsui Co. also plan to build the country’s largest solar power plant.

Japan’s new renewable and solar energy feed-in tariff is even attracting solar energy project developers and manufacturers overseas. Spain’s Gestamp Solar announced that it is going into a partnership with Japanese energy consultancy Kankyo-Keiei that entails working together to install an initial 30 MW of rooftop solar PV systems, with a longer term goal of installing 10-times that amount.