Light still shining on solar power despite shrinking FIT in Japan

The Japanese solar market has grown significantly in the past few years as it races to meet the government’s goal of achieving 53 GW of solar PV capacity by 2030. Despite its relatively small landmass, generous government incentives have meant that Japan is among the world’s leaders in terms of total solar energy produced, with a total of 23.3 GW output in 2014. Earlier this year, the Japan Renewable Energy Foundation reported that solar power was set to become profitable, adding Japan to the ranks of G7 economies where the technology has become economically viable. The island nation has even gone so far as to create floating “solar islands” with thousands of water-resistant solar panels and has turned abandoned golf courses into solar power plants.

However, this boom is set to slow unless Japan can address two of the biggest challenges which are currently facing its solar industry: decreasing Feed in Tariffs (FIT) and an aging grid infrastructure. Here we discuss two ways in which Japan can use technology to address these challenges.

1.Increasing energy efficiency to cope with lower Feed in Tariffs

Introduced in July 2012, Japan’s FIT was famously generous and triggered a surge in solar investment in the country. By the end of March 2015, the amount of installed solar power in Japan more than tripled compared to pre-FIT levels. However, 2015 marked the end of those premium rates. In April last year, Japan’s Ministry of Economy, Trade and Industry (METI) confirmed its decision to cut the country’s solar FIT by 16%, reducing the rate from ¥32 ($0.26) per kWh to ¥27 ($0.22) per kWh. The cuts have been triggered by a maturing market that has seen solar costs for operation and maintenance fall.

As FITs decrease, operators will need to look for new ways to lower costs and increase efficiency. Developments in technology, such as more effective 1.5 kV inverters, will enable the voltage to increase by up to 50% compared to the industry standard 1.0 kV, thus decreasing system losses. Additionally, this 1.5 kV 4MW inverter provides four times the power density of industry standard inverters, enabling four inverters to be replaced by one. This results in OPEX savings of up to 3% and significant CAPEX savings due to the need for fewer inverter stations, therefore generating lower installation and maintenance costs. This 1.5 kV technology is set to transform the cost, scale and efficiency of solar power conversion.

2. Smart plant control systems to cope with an aging grid infrastructuresolar-japan-2

One of the main challenges facing Japan’s solar power industry surrounds its integration with the aging grid infrastructure. Part of the problem lies in the relatively small size of Japan’s power grids and the lack of compatibility between regional power utility grids. Such has been the pace of Japan’s solar PV growth over the past three years that around 17.5 GW of FIT-approved PV projects now risk cancellation due to insufficient grid capacity. Handling the surges in solar power, which result from clear weather, can also be a major challenge for solar power producers and the utilities they supply. In fact, Japanese power companies have cited the volatility of the electricity supply as a reason for refusing to accept new solar power suppliers.

It’s therefore crucial for Japanese suppliers to have the ability to reliably and consistently meet Japan’s strict grid and utility industry standards. In order to do this, consistent power output is essential. Plant control systems, such as GE Power Conversion’s SunIQ, can coordinate all the inverters installed in a solar farm, helping to maximize power and control the power output provided to the grid.

The SunIQ system was developed within the “GE Store”–where GE’s experts around the world connect to share knowledge and ideas across different sectors. It was originally born out of the plant control system used in the wind industry, meaning the system is proven and reliable.

In cloudy conditions, SunIQ can automatically raise the power output of inverters to allow the total power output to remain at the required level. Similarly, it will make sure inverters react in a coordinated way to changing grid conditions such as helping to even out the base load at the peak times. This type of technology enables high-speed integration between the plant control system and inverters, allowing operators to execute commands faster, maximizing the efficiency.

Despite these challenges, the next few years could see a definite, but gradual, shift in Japan’s energy mix, with solar power taking over from fossil fuels and nuclear. This is exemplified by the fact that by March 2016, Japan plans to close 2.4 GW of oil-run power plants. By using technology to overcome the challenges the industry faces, another boom in solar could be just around the corner for Japan.