SolarPower Europe’s latest report, “Global Market Outlook for Solar Power 2026–2030,” includes a section on the Japanese market contributed by the Japan Photovoltaic Energy Association (JPEA) (pages 132–135); this section provides a very clear and well-organized overview of the current situation of the Japanese PV market.

This explanation outlines recent trends in the Japanese PV market based on the “PV OUTLOOK 2050” report released by the JPEA in 2024. Although the Japanese PV market has experienced somewhat sluggish conditions since 2023, it is projected to expand from 2027 onwards, despite facing various challenges.

In this column, we introduce the section of this report that focuses on the Japanese PV market.

The report (in English) can be downloaded from the link below.
Source: https://www.solarpowereurope.org/insights/outlooks/global-solar-market-outlook-2026-2030

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4.7 Japan: Recovery driven by rooftop solar, PPAs and self-consumption

Author: Takeaki Masukawa, Secretary General, Japan Photovoltaic Energy Association (JPEA)

Overview of PV developments

The Japanese PV market has been on a downward trend in recent years, following the reduction in Feed-in Tariff (FIT) support for solar PV. In 2025, around 5.7 GW of new solar PV capacity was installed in Japan, up some 0.5 GW from 2024, bringing cumulative installed capacity to 102 GW. Even with the reduced FIT/Feed-in Premium (FIP) support, Japan’s PV market is expected to start growing again from 2027, as outlined in the Japan Photovoltaic Energy Association (JPEA)’s industry report, PV Outlook 2050.

FIGURE 7.1 (GW)
Japan: Annual solar PV installed capacity 2015-2025 and market outlook 2026-2030

This is expected to be achieved through the expansion of the residential and C&I rooftop markets, as well as the rapid growth of new corporate power purchase agreement (PPA) models—which are primarily driven by the needs of energy consumers significantly impacted by rising fossil fuel costs. Additionally, increased government support aimed at improving energy self-sufficiency and strengthening energy security will contribute to the growth of the solar power market.

National solar and renewable energy targets

According to the Japanese government’s Long-term Energy Supply and Demand Outlook published by the Ministry of Economy, Trade and Industry (METI), the cumulative installed PV capacity target for 2030 is a range, between 129-146 GW (103.5-117.6 GWAC). This target will help meet the 46-50% carbon reduction objective by 2030, compared to 2013 levels. Furthermore, according to Japan’s 7th Strategic Energy Plan, approved by the Cabinet in 2025, the target share for solar PV in the energy generation mix by 2040 is between 23-29%.

According to JPEA’s PV Outlook 2050, cumulative installed PV capacity is expected to reach 150 GW (125 GWAC) by 2030. This ambitious outlook is 7 GW higher than the government’s target, with an estimated average 9-10 GW of solar PV to be installed every year from 2026 up to 2030.

Drivers for solar growth

The FIT scheme has been the strongest driver of solar market growth in Japan since its introduction in July 2012. However, the relevance of this FIT scheme has since decreased, and a more market oriented Feed in Premium (FIP) was introduced in April 2022. Instead of setting a fixed FIT rate, the FIP scheme allocates a fixed premium on top of the wholesale electricity price.

Meanwhile, opposition to solar PV has been growing in Japan amid concerns over disaster risks and environmental destruction. In 2025, the Cabinet ordered a review of the FIT and FIP schemes, including whether to end government support for ground-mounted solar PV.

The ‘self-consumption business model’ for commercial and industrial users is expanding rapidly in Japan. On-site, self-consumption PV systems are becoming more attractive to businesses, as the Levelised Cost Of Electricity (LCOE) of PV power generation is already competitive compared to rising retail electricity prices for commercial and industrial users. The increase in energy prices from the latest global oil crisis is already impacting Japanese consumers, and is expected to accelerate the expansion of this business model.

An additional driver of solar growth stems from policies setting PV mandates for new buildings. The Tokyo Metropolitan Government and Kawasaki City has made it mandatory to install PV systems on new buildings, including detached houses, starting from April 2025. Similar installation mandates are spreading to municipalities across the country, such as Sendai City. As a result, the PV market, especially residential rooftop solar, is expected to expand significantly.

In addition to the needs of renewable energy users, PPA business models are beginning to gain traction in the Japanese PV market, driven by rising electricity prices.

Utility-scale vs. distributed & rooftop solar developments

In 2025, residential PV capacity (below 10 kW) is estimated to have exceeded 1 GWAC, as it did in 2024. JPEA expects this segment to grow further, supported by the FIT and various subsidies for net-zero energy houses (ZEH) and battery systems. Beyond 2025, municipal PV installation mandates for new buildings could be a strong driver of residential rooftop market growth.

Meanwhile, distributed solar PV under 1 MW, mostly ground-mounted, is on a downward trend since 2016, mainly due to reduced FIT support. This segment needs to shift from a simple ground mounted PV business model, to a self-consumption model aligned with the energy needs of renewable energy users or the local community. The segment is also expected to further expand with the growth of corporate PPAs and the new FIT scheme for rooftop PV, which provides higher tariffs during the initial five-year period to support early cash-in.

Large solar PV systems of 1 MW and above, including utility-scale systems, are also in decline. In addition to the FIT termination, power grid constraints and land availability, opposition from local communities have also contributed to market contraction. In order to bring this sector back on a growth trajectory in the medium to long term, reforms in land use—such as Agri-solar projects— are essential.

Challenges

One of the biggest challenges for the industry is opposition to solar PV from local communities and the general public, driven by misinformation about solar and concerns over some large-scale PV plants which have caused disputes with residents. The industry must first rebuild public trust in solar energy, which has been severely undermined by misinformation and negative perceptions. This foundational effort is JPEA’s primary focus for this year.

Another important challenge is the smooth transition from FITs to more market-oriented FIPs and PPA-type business models. This decade will see a transition towards market growth with little reliance on the FIT/FIP regime.

Limited grid capacity and curtailment risks are the primary causes of the downward market
trend in Japan. In 2025, the curtailment of solar PV in the Kyushu area was around 9%, and the associated risks are becoming apparent. METI is working on additional mitigation measures to minimise curtailment risk, including demand-side management and flexible supply-side operations. Moreover, METI is developing a long-term grid expansion programme to accommodate large amounts of renewable energy.

Another major challenge for solar in Japan is land availability. New business models which don’t require dedicated land use such as on-site self-consumption models, together with the use of unused or abandoned farmland, can help address this constraint. To date, the conversion of unused/abandoned farmland to solar farms is limited as it requires strict legal procedures and permission from the local authorities. JPEA is working with other industry associations and non-profit organisations to tackle those constraints through reforms on existing laws and regulations.

The cost of solar PV in Japan still needs to be reduced or maintained in order to compete with conventional gas and coal-fired power plants. The average cost of ground-mounted solar PV is estimated at around 12.0 JPY/kWh (0.065 EUR/kWh), whereas the FIT for a ground-mounted PV system is set at 8.6 JPY/kWh (0.047 EUR/kWh) for systems 50 kW and above for 2026.

Finally, given that Japan was particularly hard-hit by the 2022 global energy crisis, one of the JPEA’s key challenges is to help communicate to the wider public and policymakers the significant role and benefits of solar power in addressing rising energy costs and reducing the country’s reliance on energy imports.

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The “PV OUTLOOK 2050” report, released by the JPEA in July 2024, provides comprehensive details on Japan’s solar PV market (118 pages, approx. 13 MB). We highly recommend you to consult this document for information on the Japanese solar PV market.
Link: https://www.jpea.gr.jp/news/16564/ (Japanese version only)

Acknowledgements: We would like to express my gratitude to the representatives of SolarPower Europe—which publishes comprehensive annual reports on solar power market trends—and the Japan Photovoltaic Energy Association (JPEA).