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  5. New Measures on Non-operation of Approved Facilities for Photovoltaic Power Generation under the Feed-in Tariff (FIT) Scheme Determined

New Measures on Non-operation of Approved Facilities for Photovoltaic Power Generation under the Feed-in Tariff (FIT) Scheme Determined

December 5, 2018

The Ministry of Economy, Trade and Industry (METI) determined new measures that will reduce the public burden caused by non-operation of approved commercial facilities for photovoltaic power generation under the FIT scheme, in light of the results of the call for public comments on this issue.

1. Background

Since the inauguration of the FIT scheme in July 2012, the number of approved commercial facilities for photovoltaic power generation and their scale of introduction have been rapidly growing. This situation of increased demand has been accelerating a dramatic decrease in the unit price of photovoltaic panels and other related costs, and therefore more recently decided procurement prices of photovoltaic power have decreased by more than 50% from the initial prices. Meanwhile, large numbers of approved facilities, which are able to take advantage of the higher procurement prices from the original scheme in which the procurement price was determined at the time of approval, have yet to start operating. These circumstances are now the cause of various problems, such as: [i] concerns over an increase in public burden; [ii] stagnation in new development of facilities and halted advancement of cost reduction; and [iii] non-operating facilities currently occupying previously allocated grid capacity (despite not providing any power to the grid).

To overcome the issue of non-operation of approved facilities, METI have taken measures on several occasions, including amending related laws. However, the number of non-operating approved facilities shows no signs of significant decrease. To address this situation, METI has held discussions to take additional measures, such as promoting the introduction of an appropriate procurement price in line with the timing of starting operations of approved facilities coupled with setting time limits on suspending the start of such facilities, as efforts to find a balance between maximizing the dissemination of renewable energy and decreasing the public burden, and prepare for proposals for new measures. Following this, from October 22 (Mon.) to November 21 (Wed.), 2018, METI called for public comments on the proposals after the discussions on the proposals under the Committee on Energy Efficiency and Renewable Energy and the Subcommittee on Mass Introduction of Renewable Energy and Next-Generation Electricity Networks of the Electricity and Gas Industry Committee, both of which are councils under the Advisory Committee for Natural Resources and Energy.

Based on the results of the call, on December 5, 2018, METI determined new measures to address the issue of the non-operation of approved facilities.

2. Outline of the new measures

For details of the new measures, see Appendices 1 and 2. Appendix 1 explains an overview of the new measures and Appendix 2 shows the summary of the sections revised from the original proposals.

Appendix

Division in Charge

New and Renewable Energy Division, Agency for Natural Resources and Energy