IT price for solar(10kW or above) in 2018FY is determined to be \18/kWh. That level is mostly and previously anticipated, due to decrease of facility cost and increase of utilization.
What matters is medium & long term price level.
FIT price(especially for solar power) is deeply connected with where national energy policy goes. In April, Conference on Energy situation proclaimed desirable energy portfolio in 2050. However, critics argue that it contains too many preconditions, furthermore, which of nuclear, renewable, fossil fuel will be the main player is far from clear.
The most valuable in Japan’s energy policy is self-sufficiency.
Therefore, nuclear or renewable power must be most strongly promoted, but presently it will be too difficult to be clearly determined. So candidly, government have to say they will promote both of them.
Putting nuclear as semi-domestic energy, they planned to strengthen energy self-sufficiency through construction and utilization of nuclear power, and realization of nuclear fuel cycle, but that picture has collapsed in vain.
Power utilities have published decommission of aged nuclear power one after another. New construction plans are stagnating everywhere. We can never imagine that nuclear power generation in 2050 will exceed before Great Earthquake level.
If we want to increase self-sufficiency nevertheless, we have no choice but to promote renewable. FIT price will be determined amid such dream and reality, or desire for self-sufficiency and stagnation of nuclear.
Author previously said the price of solar power is approximately equal to \9/kWh at present, considering power utilities’ fuel cost. So simply considered, FIT price will fall to \9 in the near future.
But energy policy will never be determined by price only.
First, price for fossil fuel is all eroded oversea, to the contrary, price for FIT will remain at home. Spread of renewable energy will be far more economically effective than payment for fossil fuel.
Second, fossil fuel price fluctuates so much, but price for FIT will be fixed for 10 to 20 years. Historically, power generation cost not rarely exceeded \20/kWh due to violent fluctuation.
Price stability of renewable will be far from a small factor considering history we have gone through.
FIT price will be determined from the viewpoint of national energy policy, especially influenced by long term stagnation of nuclear. We should not be caught with near-term fossil fuel price, but correctly evaluate the fair premium which renewable has, and recognize that the lower limit is coming nearby gradually.