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Fitch analysis sees distributed solar driving Japanese market in the 2020s

first_img FacebookTwitterLinkedInEmailPrint分享Asian Power:Japan’s distributed solar capacity is expected to become an increasingly important growth driver in its solar power sector over the coming decade as the country’s feed-in tariff (FiT) scheme for utility-scale projects is phased out amidst the underperformance of the competitive auctions mechanism, a report by Fitch Solutions revealed.The transition of projects with a capacity larger than 500kW as of 2019, to competitive auctions away from attractive FiTs, seeks to address the high costs associated with Japan’s renewables expansion. This comes especially as the idling of nuclear facilities following the Fukushima disaster, coupled with rising LNG and coal imports, have led to a spike in retail electricity prices.That said, Japan has struggled to manage the transition to an auctions system, with less capacity than expected having been awarded and cost deflation having been limited. In the country’s three first auctions, bids have trended at over $130/MWh (JPY14,200/MWh), which is substantially higher than comparably sized solar power markets, Fitch Solutions highlighted. The limited success was attributed to significant security deposit requirements, high labour costs, limitations to grid capacity availability and difficulties in acquiring land in suitable locations.Fitch Solutions also forecasts annual capacity additions to average 3.3GW between 2021 and 2024, which is a slowdown compared to the equivalent 5.5GW of added annual capacity forecasted over 2019 and 2020.“In large part, we expect distributed solar capacity to increasingly pick up the slack in Japan over the coming decade, with annual average capacity additions averaging 4GW between 2024 and 2028,” the firm highlighted.In line with increasing retail electricity prices, residential and commercial & industrial (C&I) consumers could look to deploy their own solar capacity in order to reduce their grid consumption and supply surplus generation back into the grid. Whilst the continued attractive FiT for solar installations smaller than 10kW could stimulate near-term growth in the segment, Fitch Solutions forecasts that both residential and C&I consumers will shift from grid-feed in towards self-consumption over the coming decade.More: Japan’s solar capacity to boom amidst FiT scheme phase-out Fitch analysis sees distributed solar driving Japanese market in the 2020slast_img

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