Issues raised on FIT system for renewable energy

Almost two months have passed since the implementation of the renewable energy feed-in tariff (FIT) system. Although the system has been launched fairly successfully with increasing implementation of renewable energy, experts have raised various issues in order to improve the system. Hisashi Kajiyama, senior research fellow at Economic Research of Fujitsu Research Institute, points out that purchase prices are too high compared with those in the preceding German system and that the scheme for supporting the system is immature.

According to Kajiyama , Germany intentionally suppressed the proliferation of photovoltaic power generation when it launched its FIT system. In particular, purchase prices for large-scale photovoltaic (mega solar) power plants were suppressed to make them difficult to implement. After the prices of mega solar systems came down and mega solar business became economically viable, purchase prices were further reduced and a new FIT system with a price reduction every month was introduced. These measures lessened the burden on customers. Although electricity rates rose in Germany in coincidence with the implementation of renewable energy, this was due to soaring fuel prices and other factors, he said.

In Japan, a high purchase price of 42 yen per kilowatt-hour was set as asked by some industry groups. Because the same price is applied regardless of the scale of photovoltaic power generation systems, there is concern that mega solar systems will be implemented predominantly and the burden on the nation will increase sharply, he said.

In Germany, theories and technologies on renewable energies are well shared among researchers, and there is a benchmark price for each type of renewable energy. Kajiyama argues that Japan should also develop benchmark prices.

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