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The Non-operating Solar Projects: Examining the Impact of the Feed-in Tariff Amendment in Japan

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  • Ling Chu

    (Graduate School of Economics, Kobe University)

  • Kenji Takeuchi

    (Graduate School of Economics, Kobe University)

Abstract

The non-operating solar power projects refers to a large gap between the operating and approved solar capacity in Japan. The country amended the feed-in tariff (FIT) law in 2017 to address this issue. This empirical study investigates the impact of the amended FIT policy on non-operating solar projects using municipality-level panel data from 2014 to 2019. We find that the amended policy improved the relationship between the approved capacity and operating capacity of solar power projects. The impacts are heterogeneous across different sizes of solar power projects: they are more substantial in largeand mega-scale solar power than in small-scale projects. To explore the determinants of non-operation, we also apply a cross-sectional analysis to identify municipal characteristics related to non-operating capacity. We find that the coefficient for the terrain slope is negative in the operating capacity model and positive in the non-operating capacity model. As a steep land surface leads to higher construction and maintenance costs, the results indicate that non-operating projects are located in municipalities with higher construction costs.

Suggested Citation

  • Ling Chu & Kenji Takeuchi, 2021. "The Non-operating Solar Projects: Examining the Impact of the Feed-in Tariff Amendment in Japan," Discussion Papers 2105, Graduate School of Economics, Kobe University.
    • Handle: RePEc:koe:wpaper:2105
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