Energy / Climate Change

February 18, 2012


Japan Predicting Drastic Cut of 50% or More to PV Generation Costs by 2030

Keywords: Government Renewable Energy 

The Japanese government estimates the cost of photovoltaic (PV) power generation systems will decrease drastically over the next twenty years. At the third Energy and Environmental Council on November 8, 2011, hosted by the Minister of State for National Strategy, a group of experts commissioned as the Costs Validation Committee forecasted that technological innovations to enhance the energy efficiency and durability of the generation system would lead to lower costs of PV power generation.

Assuming system installations grow at the same rate as in recent years and continue under a similar level of support by government policy, the committee projected the average cost of a mega-solar, or megawatt-scale, PV power generation system to be 280,000 yen per kilowatt (yen/kW) in 2020, or about U.S.$3,636/kW -- almost 40 percent lower than the 2010 level of 450,000 yen/kW (about $5,844) -- and 220,000 yen/kW (about $2,857) in 2030, over 50 percent lower than the 2010 level. At the same time, it estimated the average cost of a household system would decrease to 300,000 yen/kW (about $3,896) in 2020 -- which is over 40 percent lower than the 2010 level of 520,000 yen/kW (about $6,753) -- and 230,000 yen/kW (about $2,987) in 2030, about 55 percent lower than the 2010 level.

In forecasting this downward trend of costs, the committee incorporated the concept of the learning curve, in which the overall cost decreases with an increase in cumulative production volumes due to economies of scale.

The scenario simulates a substantial increase in the world's cumulative PV power production, with a ten-fold increase from the 2010 level (34,990,000 kW) to 345,230,000 kW in 2020, and a thirty-fold increase from the 2010 level to 1,081,150,000 kW in 2030.

Posted: 2012/02/18 06:00:15 AM