The Ministry of Economy, Trade, and Industry (METI) of Japan has announced the allocation of 368.8 MW of solar project capacity in its sixth auction for solar projects of 250 kW capacity or more. A total of 255 bids were selected by the ministry ranging from 300 kW to 68.8 MW. METI had initially proposed the allocation of solar projects with a total capacity of 750 MW and had set a ceiling price of $0.114 per kWh. In the auction, the lowest tariff was $0.095 per kWh and the highest was recorded at $0.114 per kWh.
Further, the tariffs were slightly lower than the lowest and highest tariffs recorded in METI’s fifth auction which was $0.10 per kWh and $0.13 per kWh respectively. The fifth auction by METI for large solar projects was held in January 2020. Due to a lack of big solar projects, only projects of 39.8 MW were selected among projects of 195.8 MW. Prior to this, the third and fourth auctions were held in 2019, the second auction in 2018 and the first one in 2017.
In October 2020, Japan had announced that it would make efforts to reduce carbon emissions to zero by 2050. Further, it aims to achieve carbon-neutrality by reducing its reliance on coal in addition to supporting solar power projects and carbon capture mechanisms. Japan plans to phase out coal and increase its renewable energy target to 45 per cent by 2030. Prior to this announcement, the government had targeted to achieve an 80 per cent reduction in emissions from 2010 levels.