Feed-in Tariff for Solar Photovoltaic: The Rise of Japan

Firdaus Muhammad-Sukki a,b,*, Siti Hawa Abu-Bakar a,c, Abu Bakar Munir d,e,
Siti Hajar Mohd Yasin f, Roberto Ramirez-Iniguez a, Scott G McMeekin a, Brian G Stewart a,
Nabin Sarmah g, Tapas Kumar Mallick g, Ruzairi Abdul Rahim h, Md. Ershadul Karim d,
Salman Ahmad i, Razman Mat Tahar i

Abstract – Japan started implementing a national Feed-In Tariff (FiT) mechanism on the 1st July 2012, which included specific payment tariffs for solar photovoltaic (PV) installations. This marks a new era in the renewable energy landscape in Japan. This paper aims at analysing the solar PV prospect in Japan, particularly in both residential and non-residential sectors. The paper presents, first, an overview of energy trends in Japan prior to the Fukushima event. This is followed by a short review of solar PV progress in the country, highlighting the major policies and programmes that have been implemented as well as the installations that have been carried out over the past two decades. Next, the financial impact of the new FiT scheme on consumers is evaluated. The financial analysis investigates the total profit, the average rate of return and the payback period. For a comparison purposes, a similar financial analysis is also conducted with selected countries around the world – namely Germany, Italy and the United Kingdom. The results from this analysis indicate that the new Japanese FiT rate generates a good profit, a moderate rate of return and an acceptable payback period, suggesting an increasing trend of solar PV uptake over the next years.

Keywords – solar energy; photovoltaic; feed-in tariff; financial analysis.

a School of Engineering & Built Environment, Glasgow Caledonian University, 70 Cowcaddens Road, Glasgow, G4 0BA Scotland, United Kingdom
b Faculty of Engineering, Multimedia University, Persiaran Multimedia, 63100 Cyberjaya, Selangor, Malaysia
c Universiti Kuala Lumpur British Malaysian Institute, Batu 8, Jalan Sungai Pusu, 53100 Gombak, Selangor, Malaysia
d Faculty of Law, University of Malaya, 50603 Kuala Lumpur, Malaysia
e University of Malaya Malaysian Centre of Regulatory Studies (UMCoRS), University of Malaya, 5990 Jalan Pantai Baru, Kuala Lumpur, Malaysia
f Faculty of Law, Universiti Teknologi MARA, 40450 Shah Alam, Malaysia
g Environment and Sustainability Institute, University of Exeter, Penryn, Cornwall, TR10 9EZ, United Kingdom
h Faculty of Electrical Engineering, Universiti Teknologi Malaysia, 81300 UTM Skudai, Johor, Malaysia
i Faculty of Technology, Universiti Malaysia Pahang, Gambang 26300, Malaysia

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