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Japan's Solar Trends to Watch For in 2014

2014/01/06 21:52
Kenji Kaneko, Nikkei BP CleanTech Institute
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There will be three new trends in the mega-solar (large-scale solar) power plant business in 2014. They are "financial scheme," "monitoring system" and "locally produced and consumed energy."

In 2014, mega-solar plants with high outputs are scheduled to start operations one after the other in Japan. As of December 2013, the largest mega-solar plant in Japan is "Kagoshima Nanatsujima Mega-Solar Power Plant" (about 70MW) in Kagoshima City, followed by "Nikki Mirai Solar" (26.5MW) in Oita City.

However, "Softbank Tottori Yonago Solar Park" (42.9MW) will start operations in Yonago City, Tottori Prefecture, in February 2014, surpassing Nikki Mirai Solar and becoming the second largest solar plant in Japan. Also, in April 2014, "Oita Solar Power" (81.5MW) will begin operation in Oita City, becoming the largest solar power plant in Japan. Moreover, mega-solar plants with output powers higher than 100MW will start power generation in 2015 in Hokkaido, Aomori Prefecture, etc.

Many of those mega-solar plants, whose outputs range from several tens of megawatts to over 100MW, will be built on former industrial sites that have been unused. Because those sites have already been developed and are located near special high voltage lines, they are suited for the construction of mega-solar plant. While ceremonies to celebrate the completions of mega-solar plants are spectacularly performed, the number of such suitable sites for new construction is decreasing.

In and after 2014, the tariff in the feed-in tariff (FIT) scheme will decrease, and the development of lower-output mega-solar plants, whose construction costs per kilowatt are relatively high, will become the mainstream. As a result, there will be an increasing pressure to further cut the prices of solar power generation systems. As the IRR (internal rate of return) of solar projects lowers, more foreign-made solar panels and peripheral equipment will be employed, and the business risks of mega-solar projects will increase.

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