Feed-in tariffs (FIT) for renewable energy became available in Japan in July 2012. The feed-in tariff rate for solar energy for the period up to March 2013 was Japanese yen (JPY)42/1kW for the operation period of 20 years. In order to get the feed-in tariff, the applicant is required to have the following conditions:
- The power plant development plan is approved by the government.
- The development plan applied for interconnection to transmission line with the electric power company.
Applicants who fulfilled these two conditions by February 2013 were awarded JPY42 feed-in tariff, which is applicable without time limit. While the approved development plan with the feed-in tariff of JPY42/1kW was accumulated to be 11,010 KW in the period from July 2012 to February 2013, only 420 KW, i.e. less than four percent of the approved plan, became operational in the same period. The feed-in tariff for the period from April 2013 was reduced by 10%, i.e. from JPY42 to JPY37.8.
It is reported that some plans might have been delayed due to the limited supply of equipment. In addition, it also is reported that some plans might have received approval to secure JPY42 feed-in tariff without a concrete investment schedule. A plan with a concrete investment schedule might have been crowded out by the latter plans from the interconnection discussions with the electric power companies. A plan with a concrete investment schedule is a sound one, whereas the plans which are merely for securing JPY42 FIT is not. As the interconnection is physically limited, such a crowding-out may have taken place. As a result, the government may want to review the approved plans for their concrete development schedules.