Japan's official rate for purchasing industrial-usage PV power in the range of 10 kW-500 kW in fiscal 2019 (starting from April 2019) will be cut, for the seventh consecutive year, by 22% to 14 yen/kWh (exclusive of tax), announced the Ministry of Economy, Trade and Industry (METI) on March 22.
Consequently, the purchasing rate, or feed-in tariff (FIT), in fiscal 2019 will drop to only one third of the level in 2012,when the mechanism started.
Meanwhile, in order to lower the PV power purchasing rate, the Japanese government has introduced an open-bidding practice with rate ceiling, whose application scope will be expanded to projects with output exceeding 500 kW in fiscal 2019, compared with the threshold of more than 2,000 kW in fiscal 2018.
Under the FIT scheme, power companies are obliged to purchase power output of renewable energy firms at the same rate within a certain period and then pass the purchasing cost to power customers.
Consequently, the METI announced that power charge will increase to 2.95 yen/kWh, up 0.05 yen, in fiscal 2019, translating to yearly power bill of 9,204 yen (767 yen per month) for the average household (with monthly power consumption of 260 kWh).
The METI also unveiled purchasing rates for other renewable energies in fiscal 2019, including 19 yen/kWh for onshore wind power (compared with fiscal 2018's 20 yen), 36 yen/kWh for offshore wind power (unchanged), 40 yen/kWh for geothermal power with output less than 15,00 kW (unchanged) and 26 yen for geothermal power exceeding 15,000 kW in output (unchanged), and 24 yen/kWh (unchanged) for biomass power with output less than 10,000 kW.
The consecutive cuts on PV FIT has put a damper on share prices of Japanese PV power firms and posed great threat to the operations of such enterprises. The number of corporate bankruptcies in the field increased, for the fifth straight year, by 8% to 95 in fiscal 2018, a record high.
(First photo courtesy of Intel Free Press via Flickr CC BY 2.0)