"Are we nearly there yet?" the kids ask from the back seat.
"Yes we'll be there soon," I say, and I'm sure we will be. Soon is always too late for some but takes others by surprise.
So we are half way through the ten-year contract with the Chubu Electric Power Company, and when it ends there is almost no chance that we will be paid as much as the 48 yen per kWh we are now getting. The tarriffs have been steadily falling each year, as was originally planned. Solar panel prices have also been falling, so the calculation of return on investment remains a little short of the ten-year contract that electricity companies are tied into for domestic installations of less than 10 kilowatts. Installations over 10kW are considered commercial, and they are tied into a lower price for twenty years. The prices of solar panels, as with all commodities, is somewhat arbitrary, and it is not completely clear whether the government is deciding the feed-in-tarriff rate based on the price of the panels, or wether the price of the panels is being set so that the feed-in-tarriff will pay the cost back.
I think this graph shows that costs of solar installations over ten years met the residential electricity rates in the middle of 2014. At that point, in theory at least, incentives become moot since it's cheaper for people to buy their electricity in the form or solar panels than it is to buy electricity company. Of course not everyone has the capital to be able to do that, but the feed-in-tarriff was still above the price people were paying for electricity. According to solar partners.jp, the amount you get for selling electricity is dropping by 2 or 3 yen per kWh per year. You could sell 1kWh for up to 33 yen in 2016, and it will be 30, 28 in 2018 and 26 in 2019. So if I'm lucky and still able to get a new contract with my old panels, I may get over 25 yen per kWh when my contract runs out.
At 25 yen per kWh it's still worth my while to connect to the grid. My income from the panels will halve, but it will still be three times more than I pay for electricity.
A worse scenario is that I get paid some market value for power generation, which could be around 11 yen. It may be a fixed rate or a floating rate. The worst scenario is that they don't pay me anything, but just expect that power to flow into their grid. I think that is very unlikely.
There has apparently been a deregulation of the electricity market, which in theory means I can shop around for the highest bidder for my electricity. Japan For Sustainability has an interesting story here about Renewable Energy Hopes and Hurdles Amid Full Liberalization of Japan's Electricity Market. "In April 2016, Japan woke up to a fully liberalized electricity market" the article begins, although even by June 2017 I can't help feeling that most people are still oblivious to this new reality.
Increased competition tends to bring down prices, which may be bad news for people trying to sell electricity. You can find out here whether changing your electric company will give you cheaper bills: https://enechange.jp/tr
Increased competition tends to bring down prices, which may be bad news for people trying to sell electricity. You can find out here whether changing your electric company will give you cheaper bills: https://enechange.jp/tr
At some value less than 20 yen per kWh, it stops making sense for me to pay the electricity company the monthly flat rate to connect to them, since we make more electricity than we use. The big question going forward for anyone investing in renewable energy is how much electricity will cost. Jay Carlis claimed in 2013 that electricity prices are not going down and here's a Guardian article from 2011 about electric cars taking over.
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