emailContact file_downloadDownloads

RTS Corporation

HOME > Monthly Perspective > Establishment of a centralized information management framework is necessary in preparation for the expanding introduction of PV power generation

Establishment of a centralized information management framework is necessary in preparation for the expanding introduction of PV power generation


It has been almost two years since the transition from the former Feed-in Tariff (FIT) program to the current FIT program and the Feed-in Premium (FIP) program. During this period, the styles of PV deployment have changed significantly from that under the former FIT program.


The introduction under the FIT/FIP programs is mainly comprised of the introduction of the projects that had not started operation under the former FIT program, and the introduction under the FIP program has been sluggish and limited. On the other hand, since the formulation of the Sixth Strategic Energy Plan and the passage of the revised Act on Promotion of Global Warming Countermeasures, the promotion of the expansion of PV power generation has spread not only to the Ministry of Economy, Trade and Industry (METI), but also to the Ministry of the Environment (MoE), the Ministry of Land, Infrastructure, Transport and Tourism (MLIT) and the Ministry of Agriculture, Forestry and Fisheries (MAFF). Consequently, the introduction support budgets based on measures under their jurisdictions are becoming the new driving force for the introduction of PV power generation.


METI is strengthening its budget to support the introduction of PV power generation, which is led by consumers promoting the shift to renewable energy electricity. MoE has established the Renewable Energy Grant to allow local governments to subsidize the PV introduction over multiple fiscal years in the projects to establish Decarbonization Leading Areas and to accelerate the introduction of renewable energy facilities. In addition, for the private sector, MoE has expanded the range of subsidies for the introduction of self-consumption type PV systems using the onsite PPA model. MLIT is promoting the PV introduction to airport properties and facilities in Japan as its initiative to promote decarbonization in the field of airports, with plans to introduce it to the fields of roads and railroads as well. MAFF is supporting the PV introduction based on the Act on Promoting Generation of Electricity from Renewable Energy Sources Harmonized with Sound Development of Agriculture, Forestry and Fisheries, etc., although the scale of the support is not large. Some local governments are promoting the PV introduction using their own budgets, not just relying on the budgets of MoE.


Table 1 Styles of PV deployment after the former FIT program (April 2022 onwards)

* The total annual installed capacity was determined by the annual difference in grid-connected PV capacity based on the reports from general power transmission and distribution operators.

©RTS Corporation


As installation costs have declined, PV power producers have been able to offer a new business model called PPA, which does not require capital for installation, and have begun to focus on voluntary installations that do not rely on the FIT/FIP programs or installation subsidies.


Under the PPA model, the owner pays the power producer an electricity fee based on the consumed amount of electricity generated by the installed PV system, which eliminates the need of financing the installation capital, and the owner can compare the PPA fee with the current contract unit price; thus the PPA model can greatly reduce the difficulty for installing PV systems. While power producers can expect long-term power generation revenues from installers, owners are released from the risk of electricity price hikes caused by fossil fuel price hikes and from financing for installation, thereby transition to renewable energy electricity will be easier. The introduction based on such negotiated transactions is becoming a new driving force, as it can increase corporate value toward decarbonized management and can also serve as a resilience measure. The introduction using this model has expanded from onsite PPAs, with which PV systems are installed in the owners’ premises, to offsite PPAs, with which PV systems are installed outside the owners’ premises and the electricity is transmitted to themselves by self-wheeling. This model is expected to grow in the future. Although all of the above are new introduction cases, there are emerging cases of repowering PV power plants, in which PV modules of existing PV power plants installed under the former FIT program are replaced with those having such excellent features as higher performances (conversion efficiency, etc.), light weight and bifacial modules. Such additional introduction at existing PV power plants is expected to increase hereafter.


As described above, in Japan today, voluntary introduction of PV power generation is emerging, utilizing the FIT/FIP programs and subsidies. Eventually, voluntary introduction is expected to take the lead and contribute to achieving the independence of the markets, from the market for residential applications to the markets for public/industrial and utility-scale applications. However, these diversified styles of PV deployment toward the independence have made it difficult to obtain the data on the PV installed capacity. While the installed capacity based on the FIT/FIP programs can be obtained through the reports on the start of operation, the installed capacity of the projects subsidized by the relevant ministries and agencies is only partially disclosed and the installed capacity of voluntary installation that does not use the programs or subsidies cannot be grasped.


Grasping the PV installed capacity is essential as it is the fundamental information for the progress to achieve the installation targets, accurate power generation forecasts and grid operations, day-to-day power supply/demand management and long-term forecasts, local production/consumption of electricity and ensuring safety in harmony with local communities, as well as future policy development by related ministries and agencies. At the same time, it is also important fundamental information for the development of different PV market segments that form the domestic PV market, such as PV systems for housing, public and private facilities, ground-mounted PV systems, AgroPV and FPV systems.


Hereafter, the styles of PV deployment are expected to become more diverse, including not only voluntary introduction, but also additional introduction to existing facilities, introduction as an independent power source, decrease due to removal, reuse of PV modules, etc. A centralized information management framework must be established for PV power generation, which takes the role of a main power source, so that the fundamental information can be obtained, such as annual and cumulative installed capacities, power generation capacity, capacity factor and annual power generation amount. A centralized information management framework must be urgently established in cooperation with the public and private sectors, before the voluntary introduction of PV power generation as a distributed power source is accelerated by electricity consumers who are switching to renewable energy power sources.


Please contact us


Please contact us from the inquiry form.