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Japan confirms solar FiT cut to JPY 32/kWh

2015-10-22

Mar 27, 2014 - Japan will trim from April 1 the solar feed-in tariff (FiT) for 10-kW-plus systems to JPY 32 (USD 0.31/EUR 0.23) per kWh from JPY 36/kWh previously, keeping the FiT contract term at 20 years, the Ministry of Economy, Trade and Industry (METI) said today.

The tariff for residential projects, excluding tax, will be decreased to JPY 37 per kWh from JPY 38 per kWh. The purchase period in that category also remains the same -- 10 years. This will be the second solar FiTs reduction after a cut in April 2013.

The government will introduce FiTs for offshore wind power from April 1, setting the rates at JPY 36 per kWh for 20 years. Tariffs for onshore wind parks will remain unchanged at JPY 22.

The hydropower segment in Japan will also benefit from the introduction of a new FiT category, according to METI’s statement. Hydropower plants utilising existing head race channels will be split in three categories - with capacities of under 200 kW, between 200 kW and 1,000 kW and 1,000 kW-30,000 kW. They will receive JPY 25, JPY 21 and JPY 14 per kWh, respectively. Hydropower plants using fully new infrastructure of less than 200 kW will get JPY 34 per kWh, those in the 200 kW-1,000 kW category will receive JPY 29 per kWh and hydropower stations of up to 30,000 kW will get JPY 24 per kWh. The tariffs will be available for 20 years.

Japan introduced FiTs for renewable power in July 2012, seeking to reduce its dependence on nuclear energy. In Ernst & Young’s February country index for solar power, Japan was the third most attractive market for PV projects. Thanks to its quickly expanding solar capacity and offshore wind efforts, the country also moved up to the fourth position in the “all renewables” country attractiveness index, replacing the UK.

(JPY 100 = USD 0.979/EUR 0.711)

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