Etrion Corporation, a solar independent power producer, announced on January 7th a strategic partnership with Hitachi High-Technologies Corporation, a subsidiary of Hitachi, Ltd., for the development, financing, construction, ownership and operation of utility-scale solar power plants in Japan.
Japan is one of the largest solar photovoltaic (“PV”) markets in the world today with over 15 gigawatts (“GW”) of installed capacity. It is a relatively low-risk jurisdiction with an attractive solar feed-in tariff (“FiT”) program and low financing costs. The Japanese government has instituted a strong mandate to increase the use of renewable energy in Japan’s energy mix in order to reduce the country’s dependence on nuclear power. The government plans to increase the share of renewable energy as a percentage of total power supply from 10% in 2011 to 25-35% by 2030. Japan has a national solar power target of 28 GW by 2020. In order to encourage solar power generation, Japan has implemented an attractive 20-year FiT program of ¥40 per kWh (US$0.38 per kWh) for projects secured by March 31, 2013, and ¥36 per kWh (US$0.34 per kWh) for projects secured the following year. The government has also announced various other policy actions, including regulatory easing, tax incentives and energy sector reforms.
Etrion and HHT have signed a development agreement and have been working closely together for more than one year to form a joint development team. The partnership is developing a pipeline that is expected to reach at least 100 megawatts-peak (“MWp”) of solar power generation facilities under construction or shovel-ready in Japan by 2015. Both parties have been providing the key functions required to successfully execute projects, such as local content, relationships with utilities and banks, engineering, procurement and construction, non-recourse project finance as well as operations, maintenance and asset management services. Etrion and HHT plan to start construction of the first solar power plant in 2014.
Marco A. Northland, Etrion’s Chief Executive Officer, commented: “We are extending the range of our partners to position Etrion as a global platform for growth. Etrion is honored to partner with Hitachi Hi-Tech and sees this as a key relationship for success in Japan and other Asian markets. We are very pleased with our progress to date, and we expect to announce our first projects shortly.”