Japan Makes Proposals on Cost Reduction of PV Systems

2016/10/19 08:30
Kenji Kaneko, Nikkei BP CleanTech Institute

Japan's Ministry of Economy, Trade and Industry (METI) publicized a report made by the Society for Strengthening Competitiveness in Solar Power Generation (chair: Shinji Wakao, professor of the Faculty of Science and Engineering, School of Advanced Science and Engineering, Waseda University) and proposed to reduce the cost of non-residential solar power generation systems to ¥200,000/kW (approx US$1,926) in 2020 and ¥100,000/kW in 2030.

The society is a study group that discusses policy measures for strengthening competitiveness in solar power generation in view of the end of the feed-in tariff (FIT) policy. It has had four closed meetings since August 2016.

Due to the revision of the FIT policy, the Calculation Committee for Procurement Price, Etc will decide on long-term purchasing prices of solar electricity in this fiscal year. And the committee will make discussions based on suggestions from the society.

According to the report, in Japan, the current cost of solar power generation systems is about ¥300,000/kW, which is two times higher than in Europe. And it proposes to drastically lower it to a market price in the aim of promoting the independence from the FIT policy.

As goals of the cost reduction, the report proposes costs of ¥200,000/kW (equivalent to ¥14/kWh power generation cost) in 2020 and ¥100,000/kW (equivalent to ¥7/kWh) in 2030 for non-residential systems and costs of ¥300,000/kW (purchasing price: ¥24/kWh or an electricity rate at home) in 2019 and ¥200,000/kW (purchasing price: ¥11/kWh or a price in the power market) as early as possible for residential systems.