Last year, the Japanese government announced the creation of a national feed-in tariff (FiT) for solar, joining Germany and China in creating robust public policy to drive deployment of renewable energy. The program is set to launch on July 1, 2012 and solar is regarded as one of the brightest spots in the Japanese recovery from the tsunami.

The new program will guarantee payment of 40 Yen/kWh ($0.50) for solar energy produced by projects >10kw (non-residential) and 42 Yen/kWh ($0.53) for energy from projects <10kw (residential) for twenty and ten years, respectively. Today, installed system prices in Japan far exceed global norms – 2011 system costs averaged ~$6.25/w reflecting a high cost of regulation, grid connection, land, labor and construction costs in Japan as well as a module supply largely dominated by higher priced domestic manufacturers. Solar panel prices in 2011 ranged from 150-200Yen/watt ($1.90-2.70/w) which is almost twice what installers in the U.S. pay.

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