Expire of FIT (Feed-in-Tariff system) on solar energy leads the power companies to fight: Companies to develop new services on promotion of in-house consumption and surplus electricity purchase
The surplus electricity purchase contracts of residential photovoltaic power generating equipment will expire sequentially from November this year.
Prior to the announcement of new purchasing contract conditions, the major electric power companies released the advanced notice for starting new services. The new electric power companies also declared one after another for purchasing this surplus electricity, and then the competition between the solar power supply owners and the demand side are likely to come into a full-scale.
In November 2009, the surplus electricity purchase system began as a voluntary initiative by major electric power company. The initial purchase price was 48 yen per 1 kWh. The price was fixed for 10 years and the cost was shared by all customers. This system was integrated into FIT (Feed-in Tariff law on sustainable energy), which was introduced in July 2012.
Therefore, the purchase contract termination that will come out from November 2019 is called “Expire FIT”, “Graduate FIT”, and attention is paid to the future action plan. Residential photovoltaic power that will be out of FIT in FY 2019 is about 530,000 cases (about 2 million kW) nationwide. At the end of FY 2023, it is expected to reach about 1.65 million cases (about 6.7 million kW).
When the purchase contract period is over, the power companies will have no obligation to purchase the surplus electricity based on the law, and the solar power supply owners should decide the use of such surplus electric power. Therefore, major electricity companies plan to continue purchasing under new conditions and some have already announced the intention of purchasing.
However, the electricity market price during the daytime, when solar power generation is able to be operated, has declined, and drastic price reduction will be inevitable compared with its original exceptional value.
If that is the case, some owners want to consume the surplus electricity for themselves particularly at night time as much as possible in order to lower the electricity bill. For its demand, new services are considered.
From next spring, Kyushu Electric Power and Mitsui & Co. will start demonstration projects that encourage in-house consumption using storage batteries.
On the other hand, there are many owners who wish to continue to contract with electricity companies if conditions are good. Chubu Electric Power and Aeon are planning to start the services to buy surplus electricity with added value.
Source: Monthly Magazine “Energy Conservation”