New Era for Renewable Energy in JapanSubmitted by Pramod Jain on Mon, 06/18/2012 - 11:51
Finally, Japan approves incentives for renewable energy. It took more than a year after the Fukoshima nuclear disaster for the renewable energy industry to get clarity about incentives. The industry is likely to takeoff in the near future. The following new incentives (http://in.reuters.com/article/2012/06/18/us-energy-renewables-japan-idINBRE85H00Z20120618, http://www.renewableenergyworld.com/rea/news/article/2012/06/japans-solar-market-poised-for-return-to-elite-status) are in place:
- 42 yen (0.53 USD) per kWh for solar of less than 10kW, and tariff is for 10 years
- 40 yen (0.50 USD) per kWh for solar of size 10kW or higher, and tariff is for 20 years
- 57.75 yen (0.73 USD) per kWh for wind for projects below 20KW, and tariff is for 20 years
- 23.1 yen (0.29 USD) per kWh for wind for projects above 20KW, and tariff is for 20 years
These are very generous feed-in tariff (very very generous for small wind), which are likely to be updated in March 2013. However, the utility is required to provide guaranteed access to grid for 3 years. What happens after 3 years is anybody's guess.
The government expects capacity of wind to increase by 500MW by end of March 2013. This will happen only if the pipeline of shovel ready (completed WRA and financing lined up) wind projects is at least 500MW. Since the Japanese wind industry was on ice for so long, pipeline may be dry; for instance on June 2011, the pipeline of wind projects was 175MW. If the grid access issue is resolved, we may see 5 to 10GW of wind in four years.
As of December 2011, Japan has 2.5GW of wind installations.