Renewables Update

Solar rooftop PV may outcompete Japan's grid electricity in 2015 in Japanese

4 December 2014 Tomas Kåberger, Chair of Executive Board, Japan Renewable Energy Foundation
Keiji Kimura, Senior Researcher, Japan Renewable Energy Foundation

Renewable electricity in Japan has evolved slowly despite generous feed-in tariffs. Monopolized electricity markets and tedious planning processes have blocked wind, geothermal and biomass projects over the last year.

However, planning regulation and powerful companies have not managed to stop the development of solar electricity. Japan has again become one of the major solar PV

markets in the world, and just as elsewhere industrial learning is fast in this industry. In five years the cost of electricity from solar rooftops has decreased from 50 to less than 30 yen per kWh. At the same time house hold electricity prices have increased in several, though small, steps. The extrapolation shown in the diagram says that if the trends continue break even would occur in the second quarter of next year, 2015.

It is clear that many factors may disrupt the trends, in particular the weakening yen may affect import prices of both solar components and fuels for conventional power plants.

Still, the imminent moment when households may profit economically from placing solar PV on their roofs may be particularly important in Japan. Household savings are high, while interest rates are low. Investments in solar rooftops may be large and fast contribution to solving the power cost problems caused by failing energy strategy.

Capacity factor: 12%, Discount rate: 3.2% (referring from METI's assumption for FIT),
Fixed O&M: 1% of the initial capital cost, Dismantling cost: 5% of the initial capital cost
The PV initial cost is based on the Aggregate Data by ‘Japan Photovoltaic Expansion Center’