Japan Solar Update: No.137 (Feb 24 ~ 28, 2025)
The Agency for Natural Resources and Energy (ANRE) under METI held the 101st Procurement Price Calculation Committee meeting, where it announced an increase in the balancing cost under the Feed-in Premium (FIP) program. For FY 2025, the balancing cost will rise by 1.00 yen/kWh (0.646 cents/kWh) across all FIP power sources, regardless of their operational start year. The adjustment for FY 2026 and beyond will be determined in future fiscal years.
<Key points>
- The Feed-in Premium (FIP) program will be promoted by increasing the amounts of balancing costs to be provided from FY 2025 onward. PV and wind power will be covered, regardless of the fiscal year they begin operation as FIP power sources
- The measure will be implemented until the fiscal year in which the FIP ratio reaches 25%
- The increase for FY 2025 will be +1.00 yen/kWh (0.646 cents/kWh), resulting in a total balancing cost of 2.00 yen/kWh (1.29 cents/kWh) provided for power sources starting operation as FIP power sources in FY 2025 and so on
- For PV systems which are only eligible for the FIP program, the eligibility threshold will be expanded from 250 kW or more to 50 kW or more in FY 2026
- An initial investment support scheme for promoting rooftop PV systems will be applied from October 2025
Balancing costs to be provided from FY 2025 onwards
Promoting the FIP program by temporarily increasing the amount of balancing costs
Target
- Natural variable power sources (PV and wind)
- To ensure fairness with projects that have already received FIP approval in advance, the measure will apply regardless of the fiscal year they begin operation as FIP power sources
Period of the measure
Until the fiscal year when the FIP ratio reaches 25%
Amounts to be provided
- Amounts to be provided decreases as the fiscal years progress
- Amounts are set within the scope*1 of the effect of reducing the burden on the public resulting from changes in the output curtailment order
- The increase in FY 2025 balancing cost is +1.00 yen/kWh (+0.646 cents/kWh)
Amounts of balancing cost to be provided after the review
|
|
Fiscal Year (FY) of starting operation as FIP power sources | ||||
| FY 2023 and before | FY 2024 | FY 2025 | FY 2026 | ||
|
Balancing Cost Subsidy Amount (JPY/kWh) |
FY 2025 | 1.80 | 1.86 | 2.00 | – |
| FY 2026 | 0.70+α | 0.73+α | 0.83+α | 1.00+α | |
| FY 2027 | 0.60+α | 0.60+α | 0.66+α | 0.80+α | |
| FY 2028 | 0.50+α | 0.50+α | 0.50+α | 0.60+α | |
Note 1: The +α portion from FY 2026 onwards will be calculated in FY 2025 onward. Note that if the FIP ratio reaches 25% by the previous fiscal year, the α will be zero
Note 2: Under certain assumptions, in case output curtailment is conducted in sequence to FIT and then to FIP power sources, multiplying the cost required to purchase 1 kWh of FIT electricity by the amount of FIT electricity subject to additional output curtailment would amount to approximately 1.9 billion yen ($ 12.3 million). Dividing this by the current amount of FIP electricity (approx. 1.5 TWh), the result is about 1.3 yen/kWh (0.84 cents/kWh).
Note 3: 1 yen = $ 0.00646 (as of February 1, 2025)
PV system capacity eligible only for the FIP program
250 kW or more in FY 2025, which will be expanded to 50 kW or more in FY 2026
Start of the initial investment support scheme
Effective in October 2025, designed to promote rooftop PV systems
From April to September 2025, the already established FY 2025 prices will be maintained as a transitional measure.
Figure 1 Balancing costs, etc. for FY 2025 onwards
Source: Materials of the 101st meeting of the Procurement Price Calculation Committee (January 17, 2025), compiled by RTS Corporation