issue: May 2009 APPLIANCE Magazine
International Report - Japan
Buy-Back Tariffs to Spur Home Solar
Email this Article
Wasaku Ishida, Japan correspondent, and president, JARN (Japan Air Conditioning, Heating & Refrigeration News)
Homeowners with photovoltaic solar power generation in Japan can sell
their surplus power back to the utilities—and get twice the usual price.
Japan has put a lot of muscle behind
growing its photovoltaic (PV) cell industry. Despite year-after-year
increases in the scale of PV production and corresponding price
decreases, the cost to install a residential system is still quite
high. However, a new program is in place to help make PV systems more
attractive to homeowners. On Feb. 24, 2009, the Minister of Economy,
Trade, and Industry Toshihiro Nikai told members of press that the
Japanese government will introduce new legislation obligating electric
utilities to purchase surplus electricity from household power
generation at prices twice as high as “usual” prices. Japan’s system is
modeled on Germany’s system of feed-in tariffs.
Ministry of Economy, Trade, and Industry (METI) intends to have the new
system in place by 2010 at the latest and plans to raise the purchase
price for home-generated power from its current ¥23 (about US 23 cents)
per kWh to about ¥50 (about 50 cents). To cover the utilities’ costs,
the average monthly household electric bill in Japan could go up by as
much as ¥100 (about US$1).
In Japan, the
installation cost of a photovoltaic home power generation system is
about ¥2.5 million (approx. $25,000). It is estimated that, utilizing
the central or local government subsidy system and selling surplus
electricity back to the utility companies, a homeowner in Japan can
recover the installation cost in 15 years. Purchases of surplus
electricity from those specializing in photovoltaic power generation
will be excluded.
METI intends to submit a
bill to the current Diet that will create a more sophisticated energy
supply structure, imposing specific goals for new energy introduction
upon gas and electric utilities as well as other industries. METI will
incorporate a provision into the bill to obligate electric companies to
purchase surplus electricity from home power generation systems.
March 18, 2009, METI released a report from its Study Group on PV
System Industry Strategy. The group is assembled from representatives
of Japan’s Commerce and Information Policy Bureau and the Agency for
Natural Resources and Energy. The group’s aim is to strengthen the
competitiveness of Japan’s solar power generation–related industries.
The study summarized future directions of development for these
industries, in terms of both industrial policy and energy policy. By
March 18, this group had already met six times.
group aims to reduce power generation costs in solar power generation
systems to about half the current level by implementing supply-side
efforts, demand-side efforts, and efforts to improve the institutional
environment. These are expected to result in economies of mass
production and technological innovation in the short term.
the medium to long term, the report forecasts that, by increasing
Japan’s share of the worldwide solar cell production from the current
level of around a quarter to over one-third by 2020, solar power
generation–related industries will create an economic effect worth up
to about ¥10 trillion (approx. $100 billion) and provide employment for
up to about 110,000 people.
Prior to the February
2009 announcement of new buy-back price incentives, Japan offered
(January 2009) to subsidize new PV installations at $700 per kWh of
The response was underwhelming. Read more:
Read more on Japan’s PV ambitions:
November 2008: Japan Grows Solar