Japan plans to cut 22% subsidy for small commercial solar systems
Specifically, the Ministry of Economy, Trade and Industry proposed to increase the FiT reduction in Japan to another critical point, that is, the FiT paid for small commercial photovoltaic power plants was reduced from 18 yen/kWh ($0.165) to 14 yen.
Previously, the Ministry of Economy, Trade and Industry also delayed the reduction of large-scale solar FiT from the original plan of March 31 to September 30. The grid connection deadline for related projects has also been extended by six months. According to the latest announcement from Japan's solar market consulting firm RTS, by September 30, developers have the opportunity to maintain a 40-, 30,000-, or 32-but FiT per kWh instead of a new tax rate of 21 yen. .
Japan's generous FiT levels were introduced to stimulate solar energy development and fill the power gap after the country shut down its nuclear power plant after the 2011 Fukushima nuclear disaster. Although the latest FiT reduction recommendations apply to commercial systems with a capacity of 10-500 kW, the tariffs for residential PV systems (up to 10 kW) for 2017-2019 will remain unchanged in 2017.
However, the residential FiT plan will be further revised next year, and the 2019 financial year committee meeting is prepared to discuss the inclusion of the residential tax rate in the same category, regardless of any obligation to install a production reduction unit.
The proposed FiT cut for overdue solar power plants with a capacity of more than 2 megawatts will affect more than 20 GW of projects. Coupled with the newly proposed cuts in commercial solar projects, which are not subject to this year's tendering scheme, the country's solar industry may be in trouble.
FiT cut announcements have raised concerns among investors and renewable energy supporters. In a joint statement, the US-Japan Chamber of Commerce, the Australia-New Zealand Chamber of Commerce, the Canadian and French Chambers of Commerce, and the European Business Council all called on the government to relax the conditions for reducing FiT cuts. They said, "Sudden production cuts do not take into account whether assets have reached milestones in development or construction, or whether they have credible investors will undermine confidence in the safety, stability and predictability of solar energy in Japan."
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