Publication date: Aug 2, 2025 Japanese Renewable Market Value to Grow by Two Thirds by 2040

Japanese Renewable Market Value to Grow by Two Thirds by 2040, Says Research Firm

The market research company, Fuji Keizai, has released the results of a study on the domestic market for renewable energy-related facilities, based on the 7th Strategic Energy Plan. It estimates that the market for renewable power generation systems is expected to reach JPY 2.0028 trillion in FY2025, and is projected to grow by 66.6% from FY2024 to JPY 2.907 trillion in FY2040.

According to the government’s 7th Strategic Energy Plan, Japan’s total electricity generation in FY2040 is expected to be between 1.1 and 1.2 million GWh, with renewable energy accounting for approximately 40–50% of that. Fuji Keizai forecasts that renewable energy generation in FY2040 will be 488,850 GWh, which is close to the lower end of the government target.

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Solar, Wind, and Perovskite Trends Shape Energy Outlook

Solar and wind power are expected to be the main renewable sources. Solar power generation in FY2040 is forecasted at 197,480 GWh, which is below the target range of the strategic plan. Although adoption is progressing due to rising electricity prices and growing demand for environmental value, factors such as limited construction capacity and smaller project sizes are expected to constrain future output growth.

Meanwhile, the development and commercialization of perovskite solar cells are expected to progress. Fuji Keizai has separately released a report on the global market for perovskite solar cells, predicting that the Japanese market will grow from an estimated JPY 80 million in FY2025 to JPY 34.2 billion in FY2040. Sekisui Chemical and Sekisui Solar Film plan to commercialize their products in FY2025.

Wind power generation in FY2040 is projected to reach 92,600 GWh, approaching the upper limit of the energy plan target. The government and industry are working to implement projects under the “First Offshore Wind Industry Vision.” Although high costs of offshore wind are currently casting uncertainty over widespread adoption, the high capacity factor of such facilities suggests that increased power output can be expected with further deployment.

Japan’s 7th Strategic Energy Plan predicts that by 2040, solar power will comprise 23–29% and wind power 4–8% of the energy mix, marking substantial rises from 9.8% for solar and 1.1% for wind in 2023 respectively. As the introduction of renewable energy increases, associated markets such as Power Purchase Agreements (PPAs) and trading (e.g., JEPX) are expected to become increasingly dynamic.

Shulman Advisory has extensive experience advising a wide range of clients in Japanese energy markets. If you are interested in learning more about our services, please contact us at info@shulman-advisory.com.