New regulations in Japan encouraging just over 5.1 gigawatts of solar photovoltaic installations in second half of 2014 ----Despite additions, ‘Japan's mountainous terrain and lack of connectivity between regional grids will continue to be obstacles to growth,' says analyst

LONDON, UK (GlobalData), 23 September 2014 - Japan will be adding a total of 8 Gigawatts (GW) to its solar Photovoltaic (PV) installations in 2014, with just over 5.1 GW coming online in the second half of the year, driven by initiatives from the Ministry of Economy, Trade and Industry (METI), according to research and consulting firm GlobalData.

The company's latest report* states that these new developments follow a period of slow deployment for Japanese solar PV projects, which forced the METI to review the previous system of Feed-in Tariffs (FiTs) and led to the implementation of a revised strategy.

Ankit Mathur, GlobalData's Project Manager for Alternative Energy, says: "Previously, companies encountered delays in acquiring approvals from government authorities for constructing PV projects on agricultural land, aggravated by developers waiting for further cost reductions in components.

"As a consequence, some developers neither finalized sites nor agreed a contract for purchasing equipment for PV power plant construction."

The METI moved to annul the FiT for projects that had failed to secure land and equipment by the end of March 2014, and to rescind any projects that had fulfilled only one of these requirements by the end of August 2014.

The METI also introduced a clause stating that any projects approved during 2014 must have a finalized site and equipment contract within 180 days.

Mathur comments: "These steps have created an immediate opportunity for module suppliers, although the installed cost of PV systems in Japan is generally higher than in other matured markets. From 1 April 2014, sales tax rose by 3%, making the total tax levy on solar PV systems around 8%.

"The Japanese PV market is gradually moving from residential to non-residential areas, attracting experienced global developers to set up large-scale PV systems in the country. However, Japan's mountainous terrain and lack of connectivity between regional grids will continue to be obstacles to growth."

*H1, 2014 Global Solar Market – Policy – The Be All and End All for the Growth of Solar Market