World's 'Most Attractive' Incentives Will Bump Japan's Solar Status

SolarIndustryMag.com
The Japanese photovoltaic market is set to grow by 120% this year, with more than 5 GW of new capacity expected, according to a new report from IMS Research (part of IHS Inc.). Benefiting from the world's most attractive PV incentive policy, Japan's solar market is currently booming, with installations expected to exceed 1 GW in the first quarter alone, causing it to become the second largest market in 2013.
Japan's PV market currently benefits from a feed-in tariff (FIT) paying up to 42 yen/kWh [0.42€/kWh at today's exchange rate], even though this rate is likely to be reduced by approximately 10% beginning April 1.
"At 42 yen, Japan's FIT is by far the most attractive globally - overly generous, perhaps, which could lead to overheating of the market," explains Ash Sharma, senior director of solar research at IHS.
"And while a 10 percent reduction in tariffs is widely expected by industry players, this will have little effect on both internal rates of return and market demand," Sharma continues. "Furthermore, many systems that have already applied for the higher FIT are able to benefit from this rate of 42 yen, even if they are installed after April 1."
The report reveals that installations are estimated at over 1 GW in the first quarter of 2013 - the final quarter of Japan's fiscal year - and forecast to exceed 5 GW for the whole of 2013. This would see Japan leapfrog ahead of Germany, Italy and the U.S. to become the world's second largest PV market.