Japan - Commercial Guide
Renewable Energy

This is a best prospect industry sector for this country. Includes a market overview and trade data.

Last published date: 2019-10-13

Overview
Japan is a top market for renewable energy products and services globally, ranked 2nd in the analysis conducted by the Department of Commerce in its 2016 Top Markets Series Report on Renewable Energy opportunities.

2016 Top Market Report: Renewable Energy – Japan
Since the earthquake and tsunami that significantly damaged the Fukushima Daiichi nuclear power plant in 2011, Japan’s power sector has been marked by significant turmoil. Almost immediately, Japan switched off its entire nuclear power network, creating a severe energy supply challenge that also spurred an important and unprecedented opportunity for renewable energy developers.

While the Japanese renewable energy market has always been significant, the decision to use policy incentives to adjust its energy mix meant that growth was all but assured. The Feed-in Tariff system (FIT) system was implemented in July 2012 to promote renewable energy deployment, and the generation capacity by renewable energy has increased steadily.  

The Ministry of Economy, Trade and Industry (METI) is in charge of enforcing the laws and regulations for renewable energy in Japan.  METI is also in charge of implementing the FIT and issuing certificates that make renewable energy projects for solar, wind, small-mid hydro, biomass and geothermal eligible for mandatory power purchase under the FIT system. 

The FIT rates are re-examined and revised annually by the METI. The FIT rates for PV have been decreasing year by year, and this year the wind FIT was also reduced. In FY2017, a tender system was introduced for solar projects with a capacity above 2MW and some categories of biomass projects, and METI also decided to use a tender system for some fixed foundation offshore wind power projects.

In 2018, the Japanese government announced its long-term energy mix plan, which cemented renewable energy’s status as a major energy source in the future while continuing to support nuclear power because of its zero carbon emissions.  The most recent energy mix targets are to have renewable sources account for 22 to 24 percent (Hydro 9%, Solar 7%, Biomass 4-6%, Wind 2%) and nuclear 20 to 22 percent of electric power generation in fiscal 2030.  While METI will continue to promote renewable energy, it will also pursue avenues to encourage renewable energy market independence from the FIT system.   Recently, it is reported that METI has started reviewing its renewable energy support policies and discussing partially ending the current Feed-in Tariff system. 

In sum, Japan has become one of the world’s largest renewable energy markets, with significant growth projected well into the future. 

Newly Installed Generation Capacity (at the end of December 2018)                               unit: Megawatt 

  Before FIT   After FIT
  Accumulated capacity   Installed Capacity
  up to end of
Jun. 2012
*FY2012
(Jul.2012-Mar. 2013)
*FY2013 *FY2014 *FY2015 *FY2016 *FY2017 *FY2018
(Apr.-Dec.)
Solar (residential) 4,700 969.2 1,307.2 820.63 853.99 794.45 662.64 442.37
Solar
(non-residential)
900 704 5,735.44 8,571.46 8,305.56 5,436.79 4,772.3 3,695.18
Wind 2,600 62.63 46.93 221.13 148.23 309.71 175.34 147.03
Hydroelectric 9,600 1.73 3.87 83.77 71.1 78.96 74.61 34.31
Biomass 2,300 30.4 91.94 101.6 293.97 333.02 409.21 259.91
Geothermal 500 0.05 0.09 4.65 5.02 4.79 6.5 1.67
Total 20,600 1,768 7,185.5 9,803.2 9,677.9 6,957.7 6,100.6 4,558.5
46,051.4 MW  (1,824,728cases)

Data Source: U.S. Commercial Service Japan calculated based on statistics issued by Ministry of Economy, Trade and Industry (METI)
*Japanese Fiscal year starts on April 1st and ends on March 31st of the next year

Feed in Tariff Rate (exclude tax)
Solar PV (procurement duration: 10 years for residential and 20 years for non-residential)             Unit: /kWh

Category FY2018 (4/1/2018-3/31/2019) FY2019 (4/1/2019-3/31/2020) FY2020 (4/1/2020-3/31/2021)
Residential < 10kW without PCS* 26 yen 24 yen TBD
< 10kW with PCS 28 yen 26 yen TBD
Residential (double power generations system**) < 10kW without PCS 25 yen 24 yen TBD
< 10kW with PCS 27 yen 26 yen TBD
Non-residential 10kW and < 500kW 18 yen 14 yen TBD
500kW and < 2,000kW 18 yen Tendering TBD
2,000kW Tendering Tendering TBD

*PCS = power controlling system, such as inverters
**double power generation = power generation system that combines residential PV system and fuel cells


Wind (procurement duration: 20 years)

offshore wind power *Fixed foundation offshore 36 yen TBD
Floating offshore 36 yen
Land-based wind power New install 20 yen 19 yen 18 yen
Replace 17 yen 16 yen
         

*move to tender system by the application of the Rules of Sea Area

Small-Medium Hydropower (procurement duration: 20 years)

installing fully new facilities < 200kW 34 yen
200kW and < 1,000kW 29 yen
utilizing existing head race channels < 200kW 25 yen
≧ 200kW and < 1,000kW 21 yen
installing fully new facilities 1,000kW and < 5,000kW 27 yen
5,000kW and < 30,000kW 20 yen
utilizing existing head race channels 1,000kW and < 5,000kW 15 yen
5,000kW and < 30,000kW 12 yen


Geothermal (procurement duration: 15 years)

< 15,000kW 40 yen
15,000kW 26 yen
< 15,000kW, utilize all existing facilities 30 yen
15,000kW, utilize all existing facilities 20 yen
< 15,000kW, utilize existing underground facilities 19 yen
15,000kW, utilize existing underground facilities 12 yen


Biomass (procurement duration: 20 years)

Wood
(forest thinning)
< 2,000kW 40 yen
2,000kW 32 yen
Wood (general, including imported biomass wood) < 1,000kW 24 yen TBD
1,000kW Tendering TBD
liquid fuel produced by agricultural harvesting Tendering TBD
Wood (waste materials of buildings, and other woody materials) 13 yen
Waste materials, excluding woody waste 17 yen
Methane fermentation 39 yen


Current Market Trends
Offshore Wind
Japan has substantial coastline and has enormous potential in offshore wind.  In the last several years, Japan has introduced new legislation to strengthen the regulatory environment for offshore wind.  In May 2016, the Port and Harbor Law was revised by the Ministry of Land, Infrastructure, Transport and Tourism (MLIT) to encourage offshore wind development in port-associated areas.  In April 2019, the Act of Promoting Utilization of Sea Area in Development of Power Generation Facilities Using Maritime Renewable Energy Resources was enacted to encourage more offshore wind power in the future. 


Aggregation and balancing system
To maximize the installation of renewable energy, the industry has shown great interests in market proven aggregation, balancing and remote-control systems and grid-level energy storage. 


Battery/storage
Prior to the current Feed-in Tariff system, METI enacted another Feed-in Tariff system in November 2009 that required utilities to purchase surplus electricity of residential solar for a 10-year period.  At the end of 2009, approximately half a million residential solar system owners signed up to the 10-year FIT contract and that will expire at the end of this year.  Those residential solar system owners may consider finding new ways to benefit from their existing soar system by adding battery storage. 


Opportunities
Renewable Energy 2019 Exhibition
Date: July 10 –12, 2019

Venue: Pacifico Yokohama, Kanagawa
Organizer: Japan Council for Renewable Energy (JCRE)


PV 2019 Photovoltaic Solar Exhibition & Forum
Date: July 10-12, 2019
Venue: Pacifico Yokohama, Kanagawa
Organizer: Fuji Sankei Business-I (The Nihon Kogyo Shimbun Co., Ltd.), CNT Inc.


The 8th Revival of Fukushima Renewable Energy Industrial Fair 2019 (REIF Fukushima 2019)
Date: October 30-31, 2019
Venue: Big Palette Fukushima, Fukushima
Organizer: Fukushima Prefectural Government and Fukushima Center for Industrial Promotion


World Smart Energy Week 2020
(FC Expo, PV Expo, Battery Japan, International Smart Grid Expo, Wind Expo, International Biomass Expo, Thermal Power Expo, and Resource Recycling Expo)
Date: February 26-28, 2020
Venue: Tokyo Big Sight, Tokyo
Organizer: Reed Exhibitions Japan


The 29th New Environment Exposition 2020 (N-EXPO 2020)
The 12th Global Worming Prevention Exhibition 2020 (GWPE 2020)
Date: April 22-24, 2020
Venue: INTEX Osaka, Osaka
Organizer: Nippo Business Co., Ltd.
*N-EXPO and GWPE are usually held in Tokyo, the venue is moved from Tokyo to Osaka for the 2020 events  since Tokyo hosts 2020 Tokyo Summer Olympic Games.


Web Resources

CS Japan Contact
Ms. Minae Suzuki, Commercial Assistant
Minae.Suzuki@trade.gov