22 T. WAKIYAMA ET AL.
value exceeds the discount rate. Risk and return ranges can be generated
from solar insolation rate probabilities in a range from 1.70 to 6.18 kW/
m^2 with future electricity use and price changes. As for NPV, a household
can acquire 187,027 JPY in profits over 20 years in the base case. The
maximum NPV is 737,412 JPY, and the mean is recorded at 49,442 JPY
(Fig. 2.2 and Table 2.3)
In addition, NPV and risk ranges are affected by the FIT fixed price.
For a 2013 fixed FIT price of 38 JPY/kWh, the probability of achieving
returns is 40 %, which is more than 10 % lower than the 2012 price of 42
JPY/kWh fixed FIT rate (Table 2.3). Moreover, the Yokohama case study
results indicate that if module prices are reduced to one-half of current
levels, 97.64 % profits and 2.48 % risk reductions can be expected per
household with 20 years fixed payment at FIT 42 JPY/kWh. Thus, to
reduce risk and increase returns, either there should be solar PV construc-
tion cost reductions or the high fixed FIT rates should be maintained.
Next, we consider the case wherein solar power generation is used for
20 years, but the FIT fixed payment is terminated in 10 years at the rate of
42 JPY/kWh. When the FIT mechanisms continue for only ten years and
the other ten years do not include fixed FIT prices, the IRR is reduced to
0.31 % in the base case. In the simulation analysis, the range of risks and
potentials is 0.17 % for the mean, −0.07 % for the minimum, and 0.48 %
for the maximum. As for NPV, a household can acquire 145,073 JPY in
profits over 20 years in the base case. The maximum NPV is 623,701
JPY, and the mean is recorded at −158,426 JPY (Fig. 2.3 and Table 2.3).
Returns can be generated with a probability of only 10 %. In this scenario,
there is no returned payment from FIT fixed payment after ten years.
However, if a household continues to use solar PV to generate electric-
ity for personal electricity use after the FIT termination, there are still
benefits to use the solar PV such as reducing electricity fees for electricity
usage and CO 2 emissions.
The last scenario is the case wherein there is no FIT, but the solar
PV is installed for personal electricity use in a household. The result
indicates that a household can acquire 79,779 JPY in profits over 20
years in the base case. The maximum NPV is 303,377 JPY, and the
mean is recorded at −364,450 JPY (Table 2.3).
In case of CO 2 emissions, the same effects can be found for the 20- and
10-year FIT fixed payment scenarios (scenario one and two) or no FIT
scenario (scenario three) by installing solar PV on the rooftop in a house-
hold. The accumulated CO 2 emissions for 4.62 kW of installed capacity