Cost Analysis and Cost Reduction Opportunities of Residential PV System in the Japan

Since the start of the Feed-in Tariff Program in July 2012, the PV market in Japan has been growing and annual installed capacity reached 10.8 GW in 2015. Newly installed PV capacity in 2016 is estimated to be 8.6 GW. While the majority segments of the new capacity are commercial, industrial and utility scale application, installed capacity of residential application remains relative low at around 0.9 GW in 2016. With the reduction of Feed-in tariff level, installation cost for residential PV system decreased from 472 Yen/W in the 2012 to 363 Yen/kW (USD 3.15/W) in the third quarter of 2016. However, cost is still higher level in comparison with Germany, Australia and other countries. It is observed that soft cost of residential PV system is one of the major factors for higher cost. In this paper, reasons behind higher cost is analyzed based on residential cost breakdown based on hearings, supply chain survey. This paper also analyze the future cost reduction opportunities by the policy change and other factors.