On August 30, 2011, the Japanese parliament passed the FIT Act. The FIT Act was designed to spur investment in, and promote the use of, renewable energy by obligating electric utilities to purchase power generated from renewable resources, specifically from solar PV, wind, hydro (up to 30MW), geothermal and biomass projects. Compared with feed-in tariff schemes in Europe and elsewhere, the Japanese FIT price is high and the current fixed-price 20-year power purchase term is particularly long – an attractive combination for renewable energy developers.
Since the FIT Act became effective in mid-2012, countless developers and investors have come to Japan looking for opportunities. Like the California gold rush of the mid-19th century, this has become known as Japan's green rush. Solar PV development has been especially active. The first half of 2013 saw twice as much solar capacity installed in Japan as in all of 2012 and most analysts expect that these strong trends will continue.
This article addresses some critical issues for investors and developers seeking to invest in renewable energy projects in Japan.
Click here to read the full article, originally published in the December 18, 2013 edition of Project Finance International.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.