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Japan is expected to significantly reduce its solar energy subsidies in 2013, according to industry analysts and reports from solar companies. Current speculation suggests that the subsidy rate may drop from the current 42 yen per kilowatt-hour to either 36 or 32 yen, representing a potential 15 to 25% reduction. The timing of the cut is still uncertain, but it's likely to take effect in March or July, prompting a surge in installations during the first quarter of 2013 as developers rush to secure current rates.
The Japan Photovoltaic Energy Association (JPEA) states that the current subsidy level ensures a return on investment (ROI) of at least 6%, which is crucial for maintaining market growth. While the government reviews electricity tariffs annually, it generally aims to keep subsidies stable over three-year periods to support long-term investment in solar power.
Data released by Japan’s Ministry of Economy, Trade and Industry in mid-December revealed that since April 2012, the country's cumulative solar capacity has reached 14 gigawatts. Residential installations accounted for 1,027 megawatts, while non-residential projects added another 371 megawatts. Since the introduction of the Feed-in Tariff (FIT) in July 2012, solar installations have grown rapidly. It is estimated that residential solar installations in 2012 reached 1.5 gigawatts, and non-residential systems added around 500 megawatts, bringing the total installed capacity to 20 gigawatts for the year. This rapid expansion highlights the effectiveness of the FIT policy in driving renewable energy adoption across Japan.