Japan Solar Update: No.29 (Jan 23~27, 2023)
At the 82nd meeting of the Procurement Price Calculation Committee on Dec 26, 2022, it was agreed to review and postpone the year to achieve the current generation cost target from 2025 to 2028, given the trends of cost reduction in Japan and the global supply and demand status. Also, it was reported that, among ≥ 10 kW PV systems installed in 2021, 1,583 projects (24.3%) of 6,507 projects whose capacity factor has been confirmed, are operating at the generation cost (LCOE) of below 10 Yen/kWh (7.63 cents/kWh).
<Key Points>
- The Ministry of Economy, Trade and Industry (METI) categorized commercial and industrial (C&I) PV systems into ground-mounted and rooftop systems, and presented an estimated values for calculating the purchase prices, etc. for FY 2024. Most of the estimated values for residential use remain unchanged
- The current price target was revised and the target year was changed from 2025 to 2028
- With next-generation solar cells in mind, it is planned to consider measures to create demand
- The conditions required for low-voltage PV projects to use the FIP program were presented
Estimated values were set by categorizing C&I PV systems into ground-mounted and rooftop systems
For ≥ 10 kW rooftop PV systems, it is planned to apply FY 2024 purchase prices, etc. from the second half of FY 2023 (October 2023 to March 2024)
Since the most of the estimated values (O&M cost, etc.) remain unchanged, there is no significant change
The current price target was revised and the target year was changed from 2025 to 2028
C&I: LCOE of 7 Yen/kWh (5.34 cents/kWh) in 2028, and 5 Yen/kWh (3.82 cents/kWh) for especially cost-effective projects in 2028
Residential: Purchase price is expected to be on the level of wholesale electricity market price in 2028
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- Measures to create demand are considered, with the new-generation solar cells (perovskite, etc.) in mind
- Consideration will be made by checking the progress of technology development and the establishment of rules for disposal of PV modules
From the viewpoint of encouraging the use of storage batteries and controlling the increase in the burden on the public, how should the rules for changing the base price when the FIP transition projects are equipped with storage batteries after PV installations be considered?
10 to < 50 kW low voltage PV systems can use the FIP program as long as one of the following requirements is satisfied
1) Power producers under the Electricity Business Act
2) Supplying electricity to electricity retailers under the direct contracts
Figure 1 Summary of discussions at the Procurement Price Calculation Committee (draft) Source: Materials of the 82nd meeting of the Procurement Price Calculation Committee (Dec. 26, 2022), compiled by RTS Corporation