Tokyo to end FiT for new solar, wind projects

05 August 2019 - 12:00 am UTC

Japan’s government plans to terminate the feed-in tariff system (FiT) for new solar and wind power generation projects, given an increasing cost burden on consumers.  

 

Japan’s Ministry of Economy, Trade and Industry (METI) today (5 August) presented the plan to a government advisory panel, under which large-scale commercial solar and wind power projects can become independent of the FiT program.

 

METI plans to streamline a new system in order to sustain competitiveness in these projects. Solar and wind energy operators are also expected to sell their power through sale negotiations or by trading on electric power wholesale markets, the company said.  METI is expected to put forth detailed plans by autumn this year.  

 

Renewable energy has gained momentum in recent years, owing to the government’s initiative to promote clean energy after the devastating March 2011 earthquake and nuclear disaster in northern Japan.  

 

“FiT system is a special arrangement aimed at a broader use of renewable energy projects in its early stages,” said Juntaro Shimizu, director of METI’s renewable energy division, at the panel meeting, adding that the government will review the existing FiT rules by March 2021.    

 

“We cannot say (renewable) power generating costs have fallen substantially compared with international standard,” he said.  

 

Solar and wind tariffs in Japan are double of countries like Germany.

 

The cost burden on consumers for purchasing clean energy is expected to reach JPY 2.43trn (USD 23bn), or JPY 2.95 per kWh, in Japan during the current business year ending 31 March 2020, according to METI. This does not align with the government’s aim to introduce renewable energy while balancing out the cost burden on consumers. 

 

The government aims to increase the share of renewable energy in the total energy mix to to 22%-24% by 2030 from the current 17%.   

 

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