Japan FIT changes needed to continue growth

Author: Ashley Lee | Published: 28 Oct 2014

Japan introduced its highly successful feed-in tariff (FIT) in 2012. But to continue growth in the renewables area, it must make changes.

The FIT was introduced to promote renewable energy following the Fukushima nuclear crisis, and the subsequent shutdown of all nuclear plants across the country. In 2012, the Japanese government pledged to pay ¥42 per kilowatt for solar energy – a deal that lawyers called ' a golden carrot’ – and has approved around 66 gigawatts (GW).

But it might have been too successful. At least five Japanese utilities have restricted new solar farms’ access to their grids to assess their capacity, and the Ministry of Trade, Economy and Industry (Meti) has also begun scrutinising projects more closely.

When the FIT was first introduced in 2012, it sponsored 18.6 GW of non-household solar power projects, said Naoaki Eguchi, head of banking and project finance at Baker & McKenzie in Tokyo. But...