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Households, firms with solar panels must be aware of upcoming change

The Yomiuri ShimbunWill solar power generation equipment that was widely installed on residential homes continue to be put to good use? The public and private sectors must work together and find the best way to tackle this issue.

The purchase — at high prices — of surplus electricity generated by solar panels at homes and other places will gradually end from November this year. This is because the 10-year term of the surplus electricity purchasing scheme, which started in 2009, will expire.

Solar panels are said to have a useful life of at least 20 years. Solar power equipment that can still generate plenty of electricity needs to be effectively used.

In 2012, the then Democratic Party of Japan-led government started a system under which utilities purchased — also at a high price — all power generated by solar power producers.

Consequently, a flood of operators entered the market. This led to the adverse effect of soaring electricity bills as utilities sought to cover the purchase costs.

At the same time, because power companies purchased “surplus” electricity that households could not use, the impact of these higher power bills for residential properties was relatively small. The system can be said to have played a certain role in the steady spread of solar power.

In November and December alone, the 10-year purchase period will end for 530,000 households, and this figure will rise to 1.65 million by 2023. The purchase price for one kilowatt-hour, which peaked at ¥48, is forecast to fall to about ¥10.

Solar-power generation equipment that has passed the 10-year purchase period should be used as a clean power source that can be domestically self-supporting.

Many challenges ahead

However, a slew of problems remain.

If the purchase period ends without a household taking any action, its surplus electricity will be transmitted to a power company without compensation. A chance for the household to earn a profit will be squandered.

Electricity from uncontracted providers will flow into each power utility’s transmission network, which will make it hard to maintain a balance between electricity supply and demand. New contracts covering sales of electricity to power companies will need to be concluded to avert such a situation.

Contracted providers currently selling electricity will be notified by their power company about six months before the purchase period ends. It is vital that these notifications not be missed.

Another method involves purchasing storage batteries to save electricity generated during good weather and then using it up at night and other times. This would make power bills cheaper and also be a provision for use in times of disaster.

However, installing storage batteries is expensive, typically costing about ¥2 million. The development of cheaper storage batteries will be essential for encouraging their widespread use.

A worrying possibility is that businesses playing up the fact that surplus electricity will be “sold for ¥0” after the purchasing period ends to pressure homeowners to buy costly storage batteries or sign new electricity-sale contracts could run rampant.

There are multiple operators that could sell electricity. It is vital that they carefully examine which approach would be the most profitable for them.

The Economy, Trade and Industry Ministry and the Consumer Affairs Agency should monitor movements in the industry and make efforts to alert businesses and households about any changes.

(From The Yomiuri Shimbun, Jan. 11, 2019)Speech



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