When Japan instituted the Renewable Energy Act (REA) in 2012, the stated policy was to encourage the development of renewable energy but to avoid the “boom and bust” cycles seen in other countries. Looking back, there is no question that the government created a booming market; particularly in solar. A reasonable question to ask now is whether we are about to see a bust?
According to figures from the Ministry of Economy, Trade and Industry (METI), 11 GW of new renewable energy was installed in the first two years of the program or about 4% of the entire installed capacity. During the same period, METI approved 71GW of renewable energy or about 25% of the total electric supply. Most of the approved projects involved PV solar but it is widely acknowledged that many of the projects that have not commenced construction by now will never be built.
Originally published in Asian Power, October 2014.
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