The Japanese Ministry of Economy, Trade, and Industry (METI) announced on June 17 the withdrawal of FIT certifications for 144 solar plant facilities with capacities totaling 290MW. While there are 288 approved PV projects totaled at 1950MW that have yet to enter the construction phase, METI has the right to revoke these projects' FIT certifications if they do not start construction by the end of August, according to analysis from EnergyTrend.
Recently, Japan PV developers have aggressively looked for investment partnership or opportunities to sell relevant certifications mainly because some of them have run into financial difficulties to complete required administrative procedures before required due dates. "The FIT price for these cases is usually JPY36/kWh. In contrast to other markets, return rates for Japan power plants are relatively high. Moreover, Japan's stable political and economical environment allows the nation to become the top one global investment region within the power plant market, attracting investors from China, Taiwan, Europe, and USA," said Arthur Hsu, research manager of EnergyTrend.
On the other hand, although Japan has better return rates, there are many details that need to be paid attention to when it comes to actual practices. The most common problem is the discordance between the actual subsidy received and the amount being made during the assessment. According to METI's regulations, apart from getting FIT certification from the government, PV developers will also have to sign electricity sales agreement with power companies in order to complete the entire PPA process. Once the PPA process is completed, final FIT prices will be finalized. This has become a common investment dispute since investors tend to neglect double check this part, which led to return rates that did not meet their expectations, added EnergyTrend.
