28 T. WAKIYAMA ET AL.
demand levels at 17.55 GW in March 2014.^14 In response to the
increasing trend in the expected renewable energy, on 21 September
2014, the Kyusyu electricity power company suspended additional
renewable energy to connect to the electricity grid (METI 2014a).^15
Other electricity companies also suspended renewable energy purchases
and limited their renewable electricity connection levels to grid sys-
tems (METI 2014c). In October 2014, the government announced
that renewable energy suppliers required not only authorization to sell
renewable energy to electricity companies but also approval for the
connection from Ministry of Economy, Trade and Industry (METI),
which limited renewable energy installation capacities.
These challenges are rooted in solar power generation that involves
issues of voltage suppression. Decentralized renewable energy is difficult
to control, which requires fluctuation control in voltage and frequency
adjustment for balancing energy demand and supply (Kyusyu METI
2011 ). If higher voltage electricity is transmitted with overcapacity, volt-
age levels across regions will increase and break down power conditioner
functioning in a manner that reverses electricity flows (MOEJ 2009 ).
Addressing this connection problem would involve building additional
infrastructure, such as output control systems, storage batteries, pumped
hydropower storage, and power grid enhancements, to avoid limiting
renewable energy installation via connection capacities (METI 2014b,
2015 ). In addition, there are emerging discussions on future electricity
equilibria, on energy trade-offs between fossil fuel and nuclear and renew-
able energy sources, and on prioritization concerns.
2.7 conclusIon
This analysis indicates that solar energy sources will enjoy an increase
in the probability of returns over 20 years for both the household and
commercial sectors, which will depend, however, on the rate of FIT
schemes and on installation costs. 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 house-
hold. For the commercial sector, in comparison to FIT fixed prices, the
IRR differs in that the IRR in the base case is reduced to 0.7 % at the
36 yen/kWh FIT rate with normal depreciation (2.1 % for the 40 yen/
kWh FIT rate). When the FIT rate is reduced to 32 JPY/kWh, the IRR
value is −0.8 % in the base case.