Japanese policymakers are now looking at rooftop solar panels because the country is land-scarce and agricultural electricity, building-integrated solar PV (BIPV) and floating solar are still in their infancy. Mark Hutchins.
As 2030 and its carbon reduction targets approach, Japan is looking for ways to increase its commitment to renewable energy. For solar energy, which is already limited by the lack of suitable land for the development of new projects, rooftops offer the best opportunity to quickly build new production capacity. And now, both the central and regional governments in Japan are announcing policies to support the installation of solar energy on the roofs of homes and businesses across the country.
Japan aims to reduce greenhouse gas emissions by 46 percent by 2030, using 2013 emissions as a starting point. As part of this goal, the country has also set itself the goal of having at least 36-38 percent of renewable energy sources in its energy mix by the same deadline.
Speaking at a World Smart Energy Week conference in Tokyo in March, Kazuya Inoue, director of climate change policy at Japan’s environment ministry, said solar energy – which has the shortest lead time of renewable energy technology – will play the biggest role. play a role in achieving the renewable energy goal. “The Ministry of the Environment is committed to solar energy,” he told an audience in Tokyo, adding that he sees benefits beyond reducing carbon dioxide emissions with plans for new solar installations to create jobs and revitalize local economies across Japan.
However, there is a long way to go to understand all of this. Inoue also noted in his speech that current plans call for nearly doubling Japan’s installed solar capacity, which was just under 70 GW at the end of 2022, to meet the 2030 targets. The political leader concluded his speech by referring to the study. It showed that Japan’s renewable energy potential is 1.8 times expected demand by 2050, and noted that “not much is yet to be done to tap this potential.”
Country restrictions
Thanks to a high feed-in tariff (FIT), Japan emerged as a leader in solar energy in the early 2000s and has since maintained an annual capacity of about 5 GW.
Today, however, there is little land for these projects, and solar energy is beginning to conflict with agriculture and other industries. In the longer term, the combination of solar energy and farmland for agricultural electricity projects opens up new targets, but these applications are in the early stages, both technically and legislatively, and are unlikely to make a significant contribution to the market before 2030. BIPV, which many have used as a key technology to reduce land use for renewable energy, is in a similar situation: There are limited products and Japan’s strict building regulations and earthquake safety requirements mean that further approval of any solar product for use as a building material is a lengthy process. There have also been developments in floating solar power, but regulatory issues and a few high-profile cases of systems being severely damaged by storms mean this segment is also struggling.
This leaves rooftop electricity as one of the most attractive options for further development of renewable energy sources in Japan, and the government is responding with several new subsidies at the central and regional levels to increase household solar power. The central government, through the Ministry of Economy, Trade and Industry (METI), has set an increased FIT rate for rooftop solar installations above 10kW, rising from 10 yen ($0.075) to 12 yen from October. Large rooftop installations (with a production capacity of at least 250 kW) are exempted from the national tender. “As solar module installation locations are now declining, METI set sales prices for commercial rooftop solar systems 20-30% higher than ground-mounted solar systems and aims to increase the willingness of companies to install commercial rooftop solar systems,” explains Izumi Kaizuka, director of research at RTS Corp., a Tokyo-based consulting firm.
Japan solar feed-in tariffs by system type (JPY)
| THE YEAR 2022 | The first half of 2023 | Second half of 2023 | THE YEAR 2024 | |
|---|---|---|---|---|
| Less than 10 kW | 17 | 16 | 16 | 16 |
| 10 kW to 50 kW installed in the ground | 11 | 10 | 10 | 10 |
| 50-250 kW installed in the ground | 10 | 9.5 | 9.5 | 9.2 |
| 10 kW up to 50 kW on the roof | 11 | 10 | 12 | 12 |
| More than 50 kW on the roof | 10 | 9.5 | 12 | 12 |
FY: Fiscal year, April 1 to March 31
Additional legislation introduced in early April should help boost commercial solar installations. Revisions to Japan’s Energy Conservation Law now require energy-intensive companies to regularly report on their status and medium- and long-term plans to transition to non-fossil fuels, and set 2030 targets for certain sectors that require fossil fuel consumption reductions (see table below).
Industry goals for non-fossil fuel energy conversion
| Area | Goal (2030) |
|---|---|
| Cement production | Share of non-fossil fuels in combustion processes (furnaces, etc.) 28% |
| Car manufacturing | Ratio of electricity from non-fossil fuels to total electricity consumption: 59% |
| Chemistry (petrochemistry/alkali) | Coal consumption decreased by 30% compared to 2013 |
| Paper manufacturing | Coal consumption decreased by 30% compared to 2013 |
| Steel (blast furnaces) | Reduction of coal consumption intensity per ton of crude steel by 2.0% compared to fiscal year 2013. Ratio of electricity from non-fossil fuels to total electricity consumption: 59% |
Source: RTS Corp
Solar energy assignments
Incentives for new solar installations are also emerging at the regional level, and they mainly focus on rooftop electricity. As of 2020, the city of Kyoto has had requirements to install solar panels on new and renovated buildings with a floor area of more than 2,000 m². In December 2022, Tokyo took this a step further by expanding the requirement to single-family homes and other smaller buildings. Tokyo Metropolitan Government (TMG) system coordination manager Kazumi Arai also spoke at the World Smart Energy Week event, saying that while an estimated 70 percent of Tokyo’s greenhouse gas emissions come from buildings, only 4.24 percent of the city’s rooftops have solar energy installed. “It’s time to act on the climate and energy crises,” he told the crowd.
In Tokyo, a new rule obliges large house builders – those carrying out projects of more than 20,000 m² – to add solar energy to new houses and other buildings of less than 2,000 m². These companies (according to RTS Oyj’s estimate, around 50 companies will come under the rule) receive a quota based on the number of buildings and sunshine in each area. In new large buildings, the owner of the building is also obliged to cover at least 5% of the building area with panels.
The law, approved by Tokyo’s city government, is set to take effect in April 2025 after a “support period” from housing developers and other stakeholders. TMG has also recently announced plans to spend ¥740 billion on a “strong and sustainable Tokyo,” including ¥150 billion to “promote the installation of renewable energy facilities in new buildings.” Other regions in Japan are widely expected to follow the capital’s lead with similar rooftop solar mandates in the coming years.
Rooftop market
Thanks to these user fees and other available subsidies, along with rising electricity prices and an attractive PPA business model, new rooftop electricity is expected to increase installation numbers across Japan. In a “business as usual” scenario, RTS Corp. expects the country’s annual solar installations to reach 8 GW in 2030, while in an accelerated scenario they could reach up to 14 GW.
Companies supplying the Japanese market are preparing for the growing demand for roofs, with many offering packaged solutions that include modules, an inverter, racks and often a battery to simplify the delivery process. Michael Zhang, head of Japan for Chinese inverter and energy storage supplier Sungrow, says he expects more companies to adopt solar power in the next few years. “Commercial PV is very attractive in Japan at the moment,” he says pv magazine. “Subsidies are available, and solar and storage are also easy to get approved.”
On the energy storage side, subsidies are available for residential and commercial batteries. However, RTS Corp says prices need to fall further for usage to grow. Discussing efforts to support storage to the extent that solar energy reaches cost parity with grid electricity, research director Kaizuka says the Ministry of the Environment “and other municipalities, including Tokyo, are providing a large amount of support to achieve storage parity, but the impact is limited so far. It will take a few more years before energy storage is achieved because batteries are still expensive and compatibility needs to be further improved.
