1. Brief Intro-Japan

Global PV Market Analysis-Japan-GesseyNewEnergyInfo 2020
Global PV Market Analysis-Japan-GesseyNewEnergyInfo 2020

Japan is located on the west coast of the Pacific Ocean in east Asia. Japan is densely populated and economically developed. Japan’s territory is made up of four large islands and more than 6,000 small islands, covering a total area of 378,000 square kilometers, ranking 11th in the world with a population of about 130 million, and ranking third in the world in terms of GDP in 2018, second only to the United States and China.

Source: sorted by GesseyNewEnergyInfo, Jan 2020

The high latitude of Japan, the temperate maritime monsoon climate makes it humid and rainy, and the irradiation resources are relatively average level. In most areas, the average annual solar irradiation amount is about 1100KWH/ m2, slightly lower than that of the European Union, and far lower than that of other large solar installation countries such as China, the United States and India.

CountryJapanChinaUSAIndiaEU
Annual Radiation(KWH/m2)1000-14001050-24501000-21001500-2200900-1300
Japan-GHI-Horizontal Irradiation-map-Solargis
source: solargis

Japan’s energy structure has roughly undergone 2 major shifts.

The first was the oil crisis of the 1970s, which made Japan aware of the dangers of relying too much on imported oil and began to develop non-fossil fuels, mainly nuclear.

The second was the great earthquake in east Japan in 2011 and the Fukushima nuclear power plant accident that began to ferment in 2013. Since then, nuclear energy has been replaced and abandoned in Japan, and the proportion of fossil energy has been increased again.

In 2015, the Japanese government released the long-term energy supply and demand outlook, aiming to increase the proportion of renewable energy generation to 22-24% by 2030. The renewable energy target was redefined in 2018. Japan’s energy development path has gradually clarified the development direction of low carbonization and sustainable.

2. Japan Solar Power Development

Since 2010, nuclear power has been the source of the fastest decline in Japan’s total power generation. In 2014, nuclear power generation was even zero. It only gradually picked up in 2017. After the rapid withdrawal of nuclear power, fossil-powered thermal power generation filled the gap for the first time in 2016, acting as a “temporary rescue”.

Since 2016, renewable energy and other types of energy have been vigorously developed. After the rapid development from 2016 to 2018, fossil-power generation has basically dropped to the level of 2013.

JAPAN POWER GENERATION STRUCTURE GWH
Source: sorted by GesseyNewEnergyInfo, Jan 2020

The share of power generated from renewable sources rose rapidly in 2016, accounting for 6.7% of Japan’s total domestic electricity generation in 2019

JAPAN renewable energy in total power generation in percentage
Source: sorted by GesseyNewEnergyInfo, Jan 2020

In 2018, solar was the largest source of renewable energy generation, accounting for 83% of total power generation, far higher than the next largest source, wind power, which accounted for 14%

JAPAN By 2018 renewable Power generation structure
Source: sorted by GesseyNewEnergyInfo, Jan 2020

From the perspective of Japan’s solar installation since 2010, it started to increase rapidly after the Fukushima nuclear power plant accident in 2013. The annual increased capacity reached a peak of 10.8gw in 2015, which has gradually stabilized in recent years, and the annual increased capacity is also around 7GW.

JAPAN Solar new and accumulated install capacity MW
Source: sorted by GesseyNewEnergyInfo, Jan 2020

Japan’s solar capacity is dominated by utility power stations, which could account for half of all new installations in 2018. The proportion of commercial and industrial sector(C&I) is next to 33%, and the proportion of residential solar installation is at least 18%.

2018 JAPAN Solar PV Installation By TYPE MW
Source: sorted by GesseyNewEnergyInfo, Jan 2020

From the perspective of the source of solar modules, due to the high domestic prices and the level of labor in Japan, imported solar products account for up to 78%, which is mainly imported from overseas. Japanese companies account for 28% of the total, and foreign companies for up to 50%.

2018 JAPAN Installed solar panel source of manufacturing
Source: sorted by GesseyNewEnergyInfo, Jan 2020

3. Related Policy and Price

  • Solar Development Policy

Energy development targets: in 2015 METI (METI Ministry of Economy, Trade and Industry of Japan) released its “long-term energy supply and demand outlook”, which calls for a review of energy development targets every 3 years. The current target is set from 2018, with renewable energy generating 22% to 24% of electricity by 2030.

FIT policy: A 2012 feed-in tariff for renewable energy, which paid high prices for the full amount of electricity generated from renewable sources such as solar power, sparked a boom in solar installations in Japan.

  • FEED-IN TARIFF

Japan’s solar feed-in tariff, introduced in July 2012, was one of the highest in the world at the time and attracted the attention of various funds. Since then, FIT pricing has been reduced year by year due to financial pressure. By 2019, FIT pricing has been reduced to 24-26 Japanese yen/KWH for small distributed projects, and only 14 yen /KWH for large distributed projects. In addition, centralized power plants of more than 2MW have been the first to abandon high subsidies and enter the era of subsidy-free, and since 2019 the 2MW above projects are fully go by auction.

Capacity Limited Time20122013201420152016201720182019
<10Kw10Years(no tax )42383733-3531-3328-3125-2824-26
>10Kw20Years(with tax)40363227-2924211814
>2MW40363227-30242118
#colspan#Unit: Japanese Yen/Kwh Source: sorted by GesseyNewEnergyInfo, Jan 2020

Now METI has said it will change the regulation in 2020, aiming to end the FIT system altogether by the end of March 2021.

  • Solar Auction

In 2017, the Japanese government enacted a bidding and auction policy for large solar projects  more than 2MW, and the FIT will no longer be implemented. The first auction was held in October 2017, and it has since been mandated to hold twice a year.

 Auction Target(MW)Actual achieved(MW)Avg. Price(Yen/Kwh)
Oct. 2017 1st50014021
Begin of 2018 2nd250null15.5
End of 2018 3rd19719715.5
2019 est. 4th300
2019 est. 5th450
Japan Solar Auction FIT price Source: sorted by GesseyNewEnergyInfo, Jan 2020

4. Solar PV Import from China

According to PV module export data of GNEI, in the year of 2018, China’s PV module export volume from Japan was 5.1GW, with an average monthly export volume of 425MW. In November 2019, the export volume was 572MW, ranking the second among China’s solar module exporters.

Chinese Module export to JAPAN MW
Source: sorted by GesseyNewEnergyInfo, Jan 2020

By solar module type, in Nov, 2019, the export to Japan mainly into Mono, about 64%, by sizing of solar module, compare with 72 cells, 60 cells are more popular counting for 56%.

NOV 2019 china Export to JAPAN Module type
Source: sorted by GesseyNewEnergyInfo, Jan 2020

5. Summary

Japan’s renewable energy development has accelerated at an unprecedented rate since the Fukushima nuclear plant accident in 2013, making it one of the biggest users of solar panels under a generous FIT  policy. In 2018, the total installed PV capacity of 56GW ranked the third in the world, second only to China and the United States. The new installed PV capacity of 6.5gw in 2018 ranked the fourth in the world, second only to China, India and the United States.

March and September 2020 are the deadline for some of the solar projects to be connected to grid to obtain FIT. Projects that are not completed before the deadline will no longer be eligible for FIT subsidies.

About GesseyNewEnergyInfo-GNEI

GNEI is a professional platform for Renewable Energy industry (mainly PV now) focusing on market info, professional consulting, research reports, industry data, brand planning, channel promotion and other services. We continue to working on market research and big data analyze to to enrich and complete the market info for our customers.


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