Japan Cuts Feed-in Tariff for Solar Electricity (page 2)

2014/03/11 19:31
Kenji Kaneko, Nikkei BP CleanTech Institute
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In addition to the lower prices of systems and the improvement in utilization rate, METI announced that annual operating and maintenance costs decreased by ¥1,000 per 1kW. Combining such figures, METI concluded that the current profitability of solar power generation projects, or an IRR (internal rate of return) of 6%, can be ensured even if the tariff is lowered to ¥32. The chairperson's proposal is also based on such observations.

The lowered tariff is a negative factor for mega-solar (large-scale solar) power plant businesses. But the majority of concerned parties said that they expected the tariff of ¥32 per 1kWh excluding tax. One of them kiddingly said, "Considering the past tariffs, METI seems to like even numbers. So, it will be ¥34 or 32 excluding tax. Since ¥34 is unlikely, it will be ¥32."

As for foundations and mounting systems, whose costs can reportedly be further cut, new products are being developed in consideration of the tariff of ¥32. Moreover, there is a growing trend of checking foreign-made solar cells and panels, whose qualities and durabilities have been doubted, with original methods. In other words, most mega-solar businesses are operating on the premise of the tariff of ¥32.