Publication date: Oct 11, 2024 Research Projects Accelerated Switch to PPA Business Model in PV Market
Research Projects Accelerated Switch to PPA Business Model in PV Market
Yano Research Institute has released an analysis of the current status of Japan’s PV market along with an outlook to 2030. The estimated installed PV capacity in Japan for FY2023 is 5,040 MW, a significant decrease from the previous year due to reduced uptake through the feed-in tariff system (FIT) established in July 2012. Reduced government purchase prices under the FIT scheme has meant commercial use of PV generation facilities introduced under the FIT system has declined significantly, while installed capacity has shrunk each year since FY2021. The low-voltage category has particularly been affected by new requirements for local utilization of on-site consumption.
Growth of On-Site and Off-Site PPAs
Meanwhile, the introduction of power purchase agreements (PPA) is expanding. On-site PPAs are being introduced against the backdrop of a trend toward decarbonization and rising electricity costs. The installed capacity of non-residential on-site PPAs in FY2023 is expected to expand to 870 MW, which accounts for 17.3% of the total installed capacity of PV. As for off-site PPAs, capacity is estimated to be 445 MW, accounting for 8.8% of the total.
Looking ahead, the Institute projects that installed PV capacity in Japan will gradually increase each year and reach 6,049 MW in FY2030, as the number of on-site PPAs and off-site PPAs increase. In particular, off-site PPAs are expected to increase faster, exceeding on-site PPAs by FY2026. On the other hand, PV generation under the FIT or FIP (Feed-in Premium) system, which is more market-driven than FIT, will continue to decline and is projected to shrink to 850 MW in FY2030.
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