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Japan Considers Reduction In The Price Of Solar Power

Experts making up a committee have recommended to the Ministry of Economy, Trade and Industry in Japan that solar power prices are dropped by 10 per cent in April 2013 plus wind payments should stay the same. However, the proposal would require the endorsement of the Japanese Government before such a change could come into force.

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(image credit: stantontcady)

In Japan last year, it is estimated that commercial solar power projects amounted to $2.3 billion (438 billion yen) that resulted in 580 megawatts of capacity being added. It is forecast that spending in 2013 is forecast to increase to 438 billion yen with 1,460 megawatts of capacity being added.

Hisao Kayaoka who is the secretary general of the Japan Photovoltaic Energy Association pointed out that the market for solar power is increasing and, therefore, it was felt that the tariff that has been put forward would not create much of a change but would enable the solar power market to expand.

It is felt by officials that, due to the reduction in the cost of solar equipment, the cutting of incentives can take place without having to tighten up on plans for development that are taking place to expand into other energy sources following the Fukushima nuclear meltdown.

In the last year, there has been a drop of around 20 per cent in silicon-based solar panel prices. Also, solar capacity for both commercial and residential increased by 29 per cent in the country during the period April to November resulting in installers increasing the base of solar power from 4,800 megawatts to 6,198 megawatts – an increase of 1,398 megawatts.

Since October 2012, there has been a drop of 14 per cent in the average price of a commercial solar power system that now costs 280,000 yen per kilowatt. This is when compared with the amount that the committee used when setting the solar power tariff for the 12 months to 31 March.

Interestingly, even when compared with the reduced rate, the support that the county provides for solar power is around triple those incentives that China and Germany provide and they are two of the biggest markets.

It was the view of the committee that the feed-in tariff that guaranteed prices that were above the market rate should be reduced to 37.8 yen per kilowatt hour for the next 20 years in respect of applications received from the 1st April 2013 – that is a reduction of 4.2 yen off the present rate of 42 yen.

Consumers will receive feed-in tariffs as surcharges and it is forecast that, after the introduction of any new tariffs, it will amount to 120 yen a month in comparison to a present figure of 87 yen per average household.

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