The FY 2026 budget requests related to renewable energy from the relevant ministries and agencies have been revealed, aimed at taking action toward realizing the GX2040 Vision, the Seventh Strategic Energy Plan, and the Plan for Climate Change Countermeasures, all of which were approved by the Cabinet in February 2025. With a new target set to increase the share of renewable energy in the 2040 energy mix to 40% to 50% (of which PV power would account for 23% to 29%), expectations for newly established budget items have grown. However, there are almost no new budget requests specifically for PV power generation, with the majority being increased funding requests for existing items.

The Ministry of Economy, Trade and Industry (METI) is strengthening its budget requests from the perspective of promoting projects and creating a favorable environment to expand PV deployment. This includes support for PV manufacturing, such as the Project to support the establishment of GX supply chain and technology development projects for large-scale deployment, Project to support the introduction of power storage systems such as grid-scale storage batteries, as well as Project promoting the proper introduction of renewable energy and Project to develop human resources for operational work. To further expand PV power deployment, METI is aiming to increase installations through measures such as the initial investment support scheme for rooftop PV systems starting in October 2025, as well as operational revisions under the FIT and FIP programs.

The Ministry of the Environment (MoE) is requesting a substantial increase in its budget from the perspective of expanding PV installed capacity, in order to vigorously promote the maximum introduction of PV power. This includes support for local decarbonization initiatives led by municipalities, assistance for PV installations in public facilities, private facilities, and the residential sector, and support for the social implementation of perovskite solar cells (PSCs), which are positioned as next-generation PV technology. Furthermore, among new budget items, MoE plans to develop a new deployment model using a collective PPA approach across the entire value chain, including large corporations and their small- and medium-sized suppliers, and to promote its horizontal expansion.

In other ministries, the Ministry of Land, Infrastructure, Transport and Tourism (MLIT) is promoting the mandatory compliance of all buildings with energy saving standards under the Building Energy Efficiency Act, as well as the introduction of PV power at various public infrastructure facilities, including airports. The Ministry of Agriculture, Forestry and Fisheries (MAFF) has amended the Act on Renewable Energy in Rural Areas and revised the MAFF’s Plan for Climate Change Countermeasures to promote the use of PV power at agricultural, forestry, and fishery facilities, as well as agrivoltaics (Agro PV) that contribute to local revitalization. The Ministry of Education, Culture, Sports, Science and Technology (MEXT) is advancing the renovation of schools into net zero energy buildings (ZEBs).

In this way, efforts by relevant ministries and agencies to expand the deployment and use of PV power have been gradually increasing year by year. However, the 2040 target PV installed capacity corresponds to roughly twice the total PV installed capacity over the past 15 years since the introduction of the FIT program. Achieving this target will require deploying PV at twice the historical pace over the next 15 years, necessitating a fundamental strategy to accelerate deployment.

When the FIT program began, there were few significant constraints, and PV installations enjoyed a high degree of freedom. However, as PV deployment expanded, challenges such as site restrictions, grid constraints, economic feasibility, variability of the power source, and the issue of ensuring harmony with local communities have emerged, narrowing the freedom for deployment. As a result, annual PV installed capacity in Japan has stagnated at around 5 to 6 GW.

The current PV market is beginning to transition from the “FIT-based market,” which pursued volume and cost reduction funded by the public, to a “self-sustaining market,” driven by electricity consumers, pursuing long term low-cost, stable supply and social acceptance. To achieve the 2040 target installed capacity, it is essential to not only implement effective government support measures to accelerate deployment but also to shift from “PV expansion driven by the government” to “PV expansion driven by citizens and businesses.” It is important that the policy measures and dissemination budgets of the relevant ministries and agencies serve as support for PV deployment by citizens and businesses. The PV industry must also transform from an industry that “relies on the government” to one that “is relied upon by citizens and businesses.” While the driving force behind deployment in the 2 2010s was overwhelmingly the FIT program, today, as shown in Figure 1, a new mix of driving forces is emerging in terms of policy measures, players, markets, technologies, business fields, and installation schemes. By strengthening and linking these driving forces, it will be possible to overcome the challenges PV power generation faces and accelerate PV deployment.

Looking toward 2030, the focus should shift to such projects and the development of a deployment-friendly environment. The next five years will be a crucial period for advancing to a new stage in which electricity consumers themselves can independently deploy PV power without relying on FIT or FIP programs, including through PPA schemes. deployment

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Figure 1 A variety of mixes serving as driving forces for the expansion of PV deployment