Since Japan formally implemented new Feed-in-Tariffs for the photovoltaic (PV) industry in July 2012, it has seen an overwhelming response and injection in the market. It is expected that with electricity prices of 42 Japanese Yen (approx. 3.36 Chinese Yuan) /kWh, internal rates of return of around 20% can be given to investors. This level of IRR has attracted and tempted many companies to invest in the PV industry either through development or through mergers and acquisition. With the strong possibility that Japan will overtake Germany as the second largest PV market in the world, many companies are vying to win a greater market share of the Japanese market.
As a professional global PV developer, investor and IPP, Sky Solar finds itself in a strong position as the Japanese market strives forward due to years of hard work, commitment and preparation. Sky Solar is now in a position to seize this opportunity and has announced the successful development of several large solar power plants through its Japanese subsidiary, Sky Solar Japan. The large scale projects will be located in Mihomura-Ibarakiken and Uto-Kumamoto on Japan's third largest island of Kyushu partly due to the abundant solar irradiation found there. The near 2MW Uto-Kumamoto PV power plant is based on an area of 25,000 m2, and is expected to use over 8,000 modules with an annual capacity of 1,950,000 kWh. This project's EPC partner will be determined by the end of July with construction to begin in October with successful completion and connection by the end of December this year. All electricity produced will be sold to Kyushu Electric Power Company. The 2MW Mihomura-Ibarakiken project will be developed on leased private land with the EPC contract to be finalized by June. Construction will begin in August and grid connection will be accomplished by the end of December.
It is understood that this year Sky Solar plans to construct PV power stations in up to 20 areas of Japan. Each station will have an installed capacity of around 2MW and each EPC contract will be determined through a public tender. For these projects, site selection and associated works have already been completed and the grid connections applications have already been sent. Sky Solar Group will invest 600 million Japanese Yen in each of these projects.