Japan May Apply Solar Brakes With Rate Overhaul, Yomiuri Reports

Solar panels stand at the SoftBank Takasago Solar Park, operated by SoftBank Corp.'s unit SB Energy Corp., in Takasago City, Hyogo Prefecture, Japan. SoftBank Corp.’s energy unit and automakers Honda Motor Co. and Nissan Motor Co. are among the companies to have already registered as power retailers.

Japan may revise its incentive program for clean energy to stem the rush of solar power producers trying to secure higher rates before the end of the fiscal year, the Yomiuri newspaper reported today.

Under the current program, renewables producers qualify to sell their power at the fixed rate set at the time they win approval from the government. The rules may change so that solar developers will only be able to get the price at the time they begin producing power, which is typically lower, according to the newspaper, which didn’t say where it got the information.

Solar power production has boomed since the introduction of a feed-in tariff program in July 2012 at the expense of other technologies such as wind and geothermal.

Officials at the trade ministry weren’t immediately available for comment.

The government reviews the tariffs for solar, wind, geothermal, small hydro and biomass yearly. Solar tariffs have been cut annually following the surge in installations while tariffs for other technologies have remained fixed.

In past years, solar producers have rushed to get project approvals before any tariff changes take effect in April.

Incentive Program

Japan has approved about 72,000 megawatts of clean energy projects since the feed-in tariff program’s inception. The bulk of the approvals, or 96 percent, has been solar. Japan had 31,000 megawatts of renewable energy at the end of 2010, according to Bloomberg New Energy Finance data.

Not all clean energy projects qualifying for incentives have been built, signaling various bottlenecks ranging from the availability of land to the cost of equipment and labor. As of June, 11,090 megawatts of approved projects have begun operating, 15 percent of the total, according to the trade ministry.

Kyushu Electric Power Co. said last week that it will suspend grid access while it reviews how much more clean energy it can handle, a move followed by some other utilities such as Shikoku Electric Power Co. (9507)

In March, Kyushu Electric received about 70,000 applications for grid access for solar power generation, equaling the amount received in the previous 11 months.

Japan’s solar tariff was 40 yen (36 cents) per kilowatt hour when the incentives started two years ago. The tariff is now 32 yen per kilowatt hour. Japan’s consumption tax, which is currently 8 percent, is added to both rates.

From April 1, the trade ministry began requiring solar projects to secure land and equipment within six months of getting approvals.

Source: http://www.bloomberg.com/news/2014-10-01/japan-may-apply-solar-brakes-with-rate-overhaul-yomiuri-reports.html