Fiscal Year (FY) 2022 ended at the end of March 2023. In April 2022, the Acts for Establishing Resilient and Sustainable Electricity Supply Systems and the revised Act on Promotion of Global Warming Countermeasures came into force, establishing an environment for PV power generation to enter the next stage. FY 2022 was a year in which we began new developments to realize the Sixth Strategic Energy Plan and the Plan for Global Warming Countermeasures and ensure energy security.
The national government established the Basic Policy for the Realization of Green Transformation (GX) and presented GX’s efforts based on the premise of securing a stable energy supply. Among them, with the aim of making renewable energy a main power source, surely achieving the renewable energy ratio of 36 to 38% in the energy mix by 2030 is clearly stated. As such, this aggressive goal has become a must-achieve goal. With regard to PV power generation, it was decided not only to expand the installations in public facilities, residences, factories and warehouses, airports, railways, etc., but also to promote the community-led PV introduction while utilizing the Global Warming Countermeasures Act. In addition, the introduction of schemes that do not rely on the FIP program will be expanded.
The Ministry of Economy, Trade and Industry (METI) has compiled a business discipline system that requires renewable energy power producers to appropriately introduce and manage renewable energy systems, and has decided to develop a legislation to promote the introduction of renewable energy in harmony with local communities. In addition to the launch of new systems such as the approval cancellation system and the system to reserve fund to cover the disposal cost, METI has worked to develop the dissemination environment for the expansion of renewable energy introduction hereafter, such as the revision of rules for output increase and long-term operation to maximize the use of existing renewable energy facilities, the promotion of installing rooftop PV systems by raising the FIT purchase price to 12 Yen/kWh ($ 9.02 cents/kWh), as well as the revision of the Energy Conservation Act to encourage the introduction of renewable energy.
The Ministry of the Environment (MoE) has established the Subsidy for transition to local decarbonization and promotion of renewable energy and started the regionally intensive deployment of PV power generation through the Project for creating leading areas of decarbonization and the Project for accelerating priority measures. MoE also accelerated the introduction of self-consumption type PV systems to private facilities using the PPA model and the introduction of standalone and distributed PV systems to public facilities.
The Ministry of Land, Infrastructure, Transport and Tourism (MLIT) has passed the Revised Building Energy Efficiency Act, which mandates for houses to comply with energy conservation standards, and will expand the introduction of PV power generation to public infrastructure facilities to road and railroad facilities as well.
Local governments have also started to expand the introduction of renewable energy in conjunction with MoE and, in particular, the Tokyo Metropolitan Government (TMG) and Kawasaki City in Kanagawa Prefecture have made it mandatory to install PV systems on newly built houses. Such measures developed by the national and local governments to expand the introduction of PV power generation are expected to continue hereafter.
Meanwhile, electricity consumers, including citizens, companies and the national and local governments, are beginning to switch to renewable energy electricity using the PPA model, etc. In addition, the financial sector is also working to strengthen businesses that will lead to the introduction of renewable energy toward the establishment of a decarbonized society. Considering the above, it can be seen that a welcome change in business environment is happening for the PV industry for its self-sustaining development in the future.
However, for the further development of PV power generation, there are concerns such as a decrease in the number of suitable sites for installation, the expansion of output curtailment throughout the country and the fragmentation of supply chains.
As shown in Table 1, the PV industry needs to reduce risks for the development of business by working on the issues such as follows; 1) stable procurement of PV systems (quantity and price + human rights issues); 2) cost reduction of power storage technologies including storage batteries; 3) limits to eliminating grid constraints; 4) speed of policy development and deregulation to eliminate location restrictions; 5) continuity of PV technology development and 6) ensuring social 2 acceptance of PV power generation. As the dependence on overseas suppliers of PV system components such as PV modules and inverters increases year by year, the PV industry will need measures to ensure stable procurement of system components with price competitiveness. Furthermore, now that the introduction of PV power generation has progressed on a large scale, the coupling of PV power generation with power storage such as storage batteries is needed and early price reduction of storage batteries has become an inevitable issue. Policy responses to eliminate grid and location restrictions must also be accelerated. As Japanese manufacturers withdrew from domestic PV production, the number of PV engineers has been declining. The continuity in technological development is also needed to maintain the capability of technological development for the advancement of PV systems.
These issues which will affect the dissemination of PV power generation in the future cannot be solved by the PV industry alone. For the development of the PV industry, which will be responsible for the installation and operation of 120 GW-scale systems in 2030, it will be important to respond to these issues while strengthening cooperation with related organizations and industries, including the national government. Globally, policy, introduction and industrial development related to PV power generation are in progress as concrete plans. To keep up with this global trend, Japan needs to develop the PV Industry Strategy that sets a goal for PV power generation to realize carbon neutrality by 2050 and share it with the public and private sectors. There is an urgent need to strengthen the industrial base and establish a sustainable market on a certain level. The PV industry must develop into a self-sustaining nextgeneration energy industry capable of supplying 150 TWh/year of electricity stably by 2030 and become a driving force in leading the realization of the GX, Green Transformation.
Table 1 The risks of business development which the Japanese PV industry must deal with