The amounts of budget requests from the Japanese governmental ministries for the expansion of renewable energy introduction in FY 2023 have been released. In order to achieve the 2030 renewable energy introduction target based on the Sixth Basic Energy Plan and the Plan for Global Warming Countermeasures, budget requests for the introduction of renewable energy by the relevant ministries and agencies are in full swing. Until now, the introduction of renewable energy has mostly been supported by the former Feed-in Tariff (FIT) program, so the budgets for the introduction by the relevant ministries and agencies have been limited. However, now that the Acts for Establishing Resilient and Sustainable Electricity Supply Systems and the amended Global Warming Countermeasures Act have been enacted, and under the Basic Policy on Economic and Fiscal Management and Reform 2022 (Basic Policy 2022) indicating that energy security will be strengthened by maximizing the use of power sources with a high decarbonization effect, the budgets for the introduction of renewable energy have been expanding.
In particular, the Ministry of the Environment (MoE) has set forth the highest priority and maximum expansion of the introduction of renewable energy, and as shown in Table 1, it has requested a significant increase of more than doubling the amount of the budget for the renewable energy introduction. As for PV power generation, since it can be introduced as a distributed power source in every corner of the country and will be a central power source for decarbonization and local production and local consumption of energy, MoE is focusing on expanding the introduction by municipalities. Aiming to spread self-consumption type PV systems to private companies, MoE will expand the fields of introduction not only in industrial facilities but also in parking lots, farms, reservoirs, waste disposal sites, etc., and promote the introduction of on-site PV power generation using the PPA model. For developing countries, the ministry will expand the budget for the promotion of the Joint Crediting Mechanism (JCM), which contributes to CO2 reduction, and promote the expansion of the introduction of PV to developing countries. In addition, MoE has doubled its fiscal investment and loans through the Decarbonization Support Organization, which is a fund that intensively supports private companies engaged in decarbonization projects.
The Ministry of Economy, Trade and Industry (METI) will continue to expand the PV introduction under the FIT/FIP programs and will expand the introduction led by electricity consumers by providing subsidies for the introduction that do not rely on the FIT/FIP programs. Furthermore, from the viewpoint of creating an environment conducive to the expansion of the renewable energy introduction, support for grid-scale storage batteries, support for demonstration of aggregating renewable energy power generation, etc., and technical development support for expanding the introduction of PV power generation are also being strengthened.
Other ministries and agencies have budgeted for decarbonization: The Ministry of Land, Infrastructure, Transport and Tourism (MLIT) has budgeted for the introduction of renewable energy to public infrastructure facilities and the strengthening of energy-saving measures for houses and buildings, the Ministry of Education, Culture, Sports, Science and Technology (MEXT) has budgeted for the renovation of school facilities into ZEB, and the Ministry of Agriculture, Forestry and Fisheries (MAFF) has budgeted for the introduction of renewable energy as part of the promotion of the Green Food System Strategy.
With these increases in budget requests from relevant ministries and agencies to expand the introduction of renewable energy, Japan’s PV introduction volume in FY 2023 is expected to be based on the subsidies from the relevant ministries and agencies, in addition to the commissioning of projects that have not yet operated as well as the introduction under the FIT/FIP programs. Under these circumstances, the number of projects that have not started operation is steadily decreasing every year, and the introduction under the FIT/FIP programs is expected to be limited hereafter. Meanwhile, the subsidy for introduction by MoE is expected to continue and be strengthened along with the expansion of the leading areas of decarbonization and the project to accelerate priority measures. From now on, the formation of promotional areas and the development of introduction through municipalities will become increasingly important. At the same time, for PV power generation, it is possible to form a market for power plants using housing, private and public facilities, public land, farmland, water surface of reservoirs, etc. on a regional basis, and it will be possible to develop projects rooted in the local communities. The PV industry should not focus only on the introduction, but should work together with municipalities and local companies to promote the development of the PV power generation in local communities that bundles new introduction, maintenance, and power generation services, and contribute to the redevelopment of the local communities utilizing renewable energy and the development of a new regional economy.