RTS Corporation has released the English version of “Forecasting PV Installed Capacity in Japan toward FY 2030 (2022 Edition)” on Monday, June 6, 2022. This is the English translation of the original Japanese report released in March 2022.
Since Japan declared its intention to become carbon neutral by 2050 in October 2020, its energy policy has largely changed its direction to make renewables a main power source and the nation is gearing up for achieving decarbonization. The waves of major changes have been observed in terms of policy and market, which has brought about a new phase toward FY 2030.
In terms of policy, Japan aims to install 117.6 GWAC of PV systems by 2030 as the “ambitious level” target, following the formulation of the “Sixth Strategic Energy Plan” and the “Plan for Global Warming Countermeasures” as well as the revision of the nation’s energy mix with the ratio of renewable energy largely increased to 36 to 38 %. Toward achieving this goal, the Ministry of the Environment (MoE), the Ministry of Land, Infrastructure, Transport and Tourism (MLIT) and the Ministry of Agriculture, Forestry and Fisheries (MAFF), as well as the Ministry of Economy, Trade and Industry (METI) are working on the initiatives to promote dissemination of PV power generation, as the ministries taking responsibilities in PV deployment (“responsible ministries”).
In terms of market, the self-consumption PV market is forecasted to grow in the 2020s, mainly for residential and building applications and the conventional MW-scale ground-mounted PV market is forecasted to shrink. Meanwhile, it is estimated that MW-scale PV systems in harmony with local communities will emerge. Deployment of small- and medium-scale ground-mounted PV systems is forecasted to continue for the utility-scale applications and as locally-used power sources, while the market of applications for parking lots, farmland and water surfaces is expected to emerge. The non-FIT/FIP market though the adoption of the PPA model, etc. is expected to emerge as well.
The “ambitious level” target is assumed to turn into “reality” through the efforts including the following: 1) establishment of economic rationality through kWh-based cost reduction of PV systems; 2) making PV a stable power source through coupling with power storage technology, mainly storage batteries; 3) policy measures to remove the location restrictions, thorough regulatory reforms and information disclosure by responsible ministries; 4) enhancement of policy measures by METI to remove grid constraints; 5) installation of PV systems as standard equipment for houses and buildings and 6) installation of PV systems in harmony with local communities.
In the newly published RTS report, the following two scenarios were assumed: 1) “BAU scenario”: The “ambitious level” target PV installed capacity of 117.6 GWAC is assumed to be achieved and 2) “Accelerated scenario”: The environment for installations is assumed to improve and develop significantly. In the Accelerated scenario, it is assumed that various measures to promote and support PV deployment will be actively enhanced and accelerated, issues will be solved and costs will be reduced by technology development, a market of new business models will emerge, and conversion to green electricity will be accelerated. Through these developments and also from the energy security perspective, it is forecasted that PV installations will be accelerated.
For each of the two scenarios, we made a forecast on the PV installed capacity toward 2030 by application, capacity range and area, with the assumptions of price forecasts, changes in the social environment, market changes and technology progress.
We forecast that, as shown in the Figure, under the BAU scenario, around 8 GWDC/year of PV systems will continue to be installed and the cumulative installed capacity by FY 2030 will be 154 GWDC (= 121 GWAC). Under the Accelerated scenario, we forecast that, the annual PV installed capacity will grow year after year from 6.8 GWDC (estimate) in FY 2021 to reach 14 GWDC/year in FY 2030. The cumulative installed capacity by FY 2030 is forecasted to reach 180 GWDC (= 140 GWAC).
As for the installation models, so far, the majority of PV installations have been supported by the FIT program. Hereafter, however, the models are assumed to diversify and shift to new non-FIT/FIP business models. By around FY 2025, it is forecasted that the share of non-FIT/FIP PV systems will be larger than FIT/FIP-supported PV systems.
By application, PV installations are expected to grow in the applications including the following, as shown in the Table: 1) installations on newly built houses and private buildings with the PPA model; 2) installations on public buildings with the initiatives of the national and local governments; 3) ground-mounted PV installations in harmony with local communities through positive zoning; 4) installations on infrastructure facilities such as airports and roads and 5) installations of AgroPV and floating PV (FPV) systems, which have started growing as new markets.
Most recently, the impacts of the COVID-19 pandemic have prolonged, which is stagnating social and economic activities as a whole, affecting the PV industry as well. Furthermore, there are other issues such as PV module price increase due to the shortage of raw materials, supply shortage of inverters due to the shortage of semiconductors, the Xinjiang Uyghur issue, and Ukraine conflict. Despite these issues, it is estimated that things will take a favorable turn by the end of FY 2022, and on a mid- to long-term basis, the environment for expanding PV dissemination is expected to improve and the PV installations will increase from the perspectives of decarbonization and energy security as well.
Note: Numbers in DC represent the capacity of PV modules (on the DC side) and those in AC represent the output capacity of inverters (on the AC side, output capacity of power plants).
For details of RTS English reports, please click here.
YouTube video for introducing this report is also available.