Do you have solar panels? If not, why not?
You can install two types of systems: under 10kW (classified as domestic) and over 10kW (classified as commercial). A domestic system can use some of its own electricity and sell the rest. A commercial system must sell all of the electricity and cannot use any.
This site has price comparisons updated monthly. We were quoted 3 million yen for a system just under 10kW by a house builder.
When you install the system you are guaranteed a special rate to sell your electricity at for ten years. This year the rates are 30 or 28 yen per kWh (for a domestic system and depending on where you are), falling by 2 yen next year (and presumably being phased out over time). A commercial system gets a lower rate. You get to keep the same rate for ten years after signing up.
Unfortunately the government has chosen to phase out most of the subsidies (I think we can get 60,000 yen per installation here in Miyagi), but even without them the maths seems to work.
Predictions for how much you’ll be able to sell electricity on the open market after the preferential rates end seem to be around 11 yen per kWh, but there are no guarantees here.
The simulations I have seen seem to indicate that by using some electricity in the day when rates are high (33 yen?) and selling the rest you should be able to pay for the cost of your panels in around ten years’ time. You would pay for cheap night-time electricity normally during this period (11 yen?).
Once the panels are paid off, you then get free electricity for the rest of their working life (estimated at 25-40+ years).
The recommended strategy seems to be to sell electricity while you have access to the special rates, then once they end buy a battery so that you can charge it in the day and use it at night. You may also be able to sell any excess power for a small bonus.
Batteries are improving rapidly at the moment, both in capacity and cost. The Tesla Powerwallย doubled in capacity in one year (from 7 to 14 kW). Tesla Powerwalls currently cost about 800,000 yen and can run a normal house for 2-3 days.
Right now a large number of companies are developing and selling batteries for cars and buildings, so I predict batteries will have much higher capacity and cost much less in ten years time.
Another benefit of having a battery is that during earthquakes or power outages there is a good chance you will have power. This probably doesn’t sound so great until the power goes out for several days. Then it’s wonderful.
You may also be able to use an electric car’s battery as storage for your home, giving you more capacity if you need it.
There are of course many unknowns. How long will the solar panels last? How about the inverters and other equipment? Will it be possible to sell electricity after the ten-year period? Will grid electricity get cheaper or more expensive in the future? Will daytime electricity end up cheaper than night-time as panels become more common? Will solar panels become cheaper and more efficient, making it better to wait?
For me there are three other non-financial benefits to installing solar panels. I believe a quick transition to renewable energy is desirable for a number of reasons. By installing panels we can make future solar installations cheaper by increasing economies of scale, reduce demand for grid electricity, making it harder for the government to ignore renewable energy, and reduce emissions locally.
Eventually I also plan to get an electric car and charge it from the panels, for basically free transportation. Electric cars are predicted to last 4 times as long as internal combustion engine cars, mainly due to them having fewer moving parts.
So what do you think? Am I understanding the situation correctly? Is it really a no-brainer to get panels? What’s your experience with solar installations? Did anyone seriously consider getting solar and then decide not to? Why?
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Hi Ben,
Thanks for another interesting post.
About 5 years ago we had an interest in installing a solar power system. I’m short on the details but I do remember that the estimated time pay for the cost of our panels and new roof tiles (1 million) was fifteen years and about 5,000,000. At that time our electric bill for house and school was around 100,000 yen P.A. I was 62 at the time and the best plan the salesman could come up with didn’t make financial sense to me and since then we have lost a couple of hours sunshine to a new apartment block (there was an old bungalow there before) opposite. BTW we drive a 17 years old Honda Vamos, which cost us 300,000 yen several years ago.
So your own age, the age and condition of your house, your present and projected energy needs, the possibility of losing some of your sunlight and whether or not getting an electric car or hybrid is your best option.
Just some thoughts on the matter.
That’s a great point, David. I guess the more electrified your house is, the better it works.
If you only use 100,000 yen a year, you wouldn’t need as large a system. I’m guessing you could get something that would fit your needs for 1/3 of that price now. Might be worth shopping around if you are interested ๐
Hold the presses! I have just received some incredible information from a house maker.
Seems like I will have to write another blog post next week, and this one will come to the opposite conclusion ๐
Or not, actually. He just emailed me to say he made a mistake. Phew.
The post stands!
This article has more information: http://pv.energytrend.com/news/Japan_Lowers_FIT_Scheme_for_Solar_Power_for_2017.html
Could you provide more details on how the solar panels would pay for themselves in 10 years.
Hi Alan, thanks for that link.
In brief, the solar panels pay for themselves by:
1) reducing your daytime electric bill
2) allowing you to sell extra electricity
The rates for selling electricity are set for ten years when you register. This year that would be 31 yen per kWh and 28 yen next year (and 26 the year after).
The sweet spot appears to be a system just under 10kW, which is the largest to quality as domestic.
After the initial ten-year period you could then sell extra electricity at the market rate (might be zero!), or use it yourself by installing a home battery.
The numbers will depend on where you live and how you pay for the panels. If you have a house that uses a lot of electricity that will be better once the ten-year special rate ends.
If you can include the panels in your mortgage they’ll be much cheaper.
If you have a good roof position and climate that will be better.
The price of panels is coming down a lot so the numbers might still make sense even with the lower rates to sell.
Any vendor will be able to give you a simulation of costs and electricity production, etc. You can then make a decision.
I’m pretty sure we’ll get 10kW on our new house.
How does including the panels in your mortgage make it cheaper? I’m in Okinawa with a flat roof and no tall buildings around so it might be ideal. We had the builder prepare the house for panels but we haven’t done any research. It’s on my to-do list though so I was so happy to see this post. I was hoping that the system would cost about 1 million yen, though. Even at that price it worries me a little. Would it really pay for itself? I also think that the panels have a 10 year warranty so if something goes wrong, and something always goes wrong you have more expenses. Not only does it have to weather the hot sun but also typhoons and salty air.
Including it in your mortgage just means you can finance it at 0.5% or whatever.
We had solar panels installed when we built our house late in 2015. I can’t remember the exact cost but I remember calculating that it would indeed take 7-10 years for the panels to pay for themselves. The builder showed us catalogues of three different types/manufacturers (Chinese and Japanese) but we just went with the middle of the range Panasonic ones.
We chose to include the cost of the panels and installation within the amount of money we received for our mortgage instead of paying with our own cash. Basically we had a choice between spending money on a nice driveway and garden or buying the panels. As the panels generate income it was a no brainer.
And of course that income goes towards repaying the mortgage every month. We currently sell our electricity (all of it I think) to Chubu Electric for between ยฅ8000 ~ ยฅ13,000 a month depending on the season and receive a separate bill for usage which is usually about ยฅ3500 ~ ยฅ4000 a month.
We have a big roof angled towards the south with no obstructions making it close to perfect for solar panels.
How big is your system, Sean? How many kW?
Last month it generated 419kwh and we got paid just over ยฅ13,000. In May it generated 336khw.
Oh, sorry, I meant how big is the system. 5kW? 10kW?
The capacity according to the paperwork we have is 4.0kw (ๅฎๆ ผๅบๅ) and it’s currently running at over 96% efficiency (whatever that means).
Thanks, Sean! That’s really encouraging.
We’ll probably install 10kW, so hopefully we’ll get a proportionally larger benefit each month. I fear there will be many more meetings before then though ๐
That’s good to know. Could you tell us how much the panels cost including installation? How many many panels do you have? Are they a standard size? Wondering how much space I need to on my roof? You wouldn’t have a model no. for your panels? Sorry for all the questions but interest has been piqued.
You’re probably best off talking to some local companies and seeing what they say. Conditions vary, so Miyagi is going to be very different from Okinawa ๐
I believe that there have been recent changes that allow over 10kW installations to choose between selling everything and and selling just what you don’t use.
Also contracts for under 10kW are for 10 years, where as contracts for over 10kW can be 20 years. A few years ago, when you could lock in 20 years at good amount per kW it was definitely the best investment you could make in Japan, unfortunately with the prices falling, it’s not so certain anymore.
I’m also interested in the solar roof tiles that Tesla starts selling this year. If they are as good as all of the marketing, it seems like they would make sense.
Either way, I’m still a few years off from owning my own home, so solar is on the backburner for me at the moment.
Not sure about that change: we were told yesterday that up to 10kW gets the higher tariff and can use some of the electricity: above that doesn’t and can’t.
The 20-year period is interesting though. It would be 21 yen for us if we build next year…
I’ll have to look at it.
You can check out some info here
https://www.eco-hatsu.com/question/answer3/2438/
Under 10kW you can only do use then sell, but over 10kW you can choose between use then sell, or full sell, and over 10kW gives you a 20 year contract. Depending on electricity prices now, and whether they will rise higher than the payout per kW will be the biggest factor in determining which plan you go for. A few years ago it was a no brainer of selling everything. These days, I haven’t crunched the numbers myself, so I’m not so sure.
Thanks, Tony! That’s really interesting. Looking at the data on that site (prices,etc.) it’s at least 5 years old. I wonder if the rules have changed in the meantime?
Time for some more research ๐
And… I owe Tony an apology! He is correct, and larger systems can use some of the electricity and sell the rest.
Going to run the numbers on a larger system and post again with our findings ๐
I looked into this as well about 7 years ago. Two different companies gave us full presentations and quotes. My wife and I also did other investigations to come up with our own quotations. We were looking at investing between 2.7 million and 3.4 million yen for an all-denki home. I also came to the same conclusion that it would be paid for in about 10 years. It just wasn’t a good investment. I would like to look at it again because I think that prices have come down.
Let us know what you discover!
I hope to get solar panels some day
But… about your roof.
In Japan , the common roof will need to be painted every 10-15 years, depending on the type of paint. What is the cost if the panels need to be moved?
Hi Peggy
That is a great question to add to our ‘list of awkward questions for the house builder’. I think they said it would be tiles, and tiles don’t need painting do they?
Because of the configuration and orientation of our roof, we only have a 2.7kW capacity. My husband figured that it would take about 10 years to pay for itself. We do have a battery and I don’t remember the capacity (I’m not in Japan right now so I can’t check). We are getting 33yen per kW sold. The battery fills up at night for one third that amount. We sell the most during spring and fall, in between using heating or cooling.
In late June, we received a letter requiring us to submit certain documents to prove we were who we said we were and that we were living where we said we were to continue to receive the payment for the electricity our panels were generating. The deadline is September 30. It does not make sense to me. But my husband says we have to do it. We have to submit them to some governmental agency.
Thanks for the information, Catherine!
Sounds like people have been abusing the system, resulting in annoying government checks in response.
We are in Tokyo. The panels have a 15-year guarantee and we put them on 2 years ago. We added the panels at the same time as renewing the caulking between the siding panels, reprinting them (a solid color from fake brick look) and painting the roof tiles (green! my favorite color, from black). I don’t recall a mention of having to do this again in 15 years. The impetus for doing the above was the fact that the caulking on the south side was drying out and that is the direction from which we often get rain.
I am satisfied with the solar panel performance so far. But I haven’t done a detailed analysis of these two years.
After a very sunny day there is a kind of satisfaction to view the bell curve of energy production.
Unfortunately for us, we just don’t get enough sunlight to pay for the panels. If I could just break even, I would do it in a heartbeat. I would suggest though that you look in to how long the newer panels actually last. I have heard from three different students that their solar panels needed replacing right at 15 years. Three different people living in different places with different brands. Each person’s panels dying out at exactly 15 years.
Hi Rick, that is really interesting (and worrying). I have read that solar panels are mechanically simple so should last 40+ years of normal operation.
Apparently the inverters are not so durable and might need to be replaced sooner, but batteries (like the PowerWalls) have them built in, so it might not be a big deal.
Something to look into, certainly.
To be honest. It may very well have been the inverters that went down. I didn’t ask them particular details. With all three, they just said that they were disappointed that they were no longer working and had no plans to replace the system due to costs (I hate being chauvinistic, but these housewives may not have been too interested in the details.) Finally, I had one other student whose wife had been approached by a solar salesperson. This student was a bit of a geek engineer. He went online and researched and calculated. He told his wife to just ignore any more salesmen. While the the sales pitches were good, in his own calculations though, the part that the sales didn’t mention, (what he called maintenance, particularly yearly) ensured that solar systems would never pay for themselves.
Interestinger and interestinger. I’ve never heard of yearly maintenance on solar systems.
More questions for our guy ๐
This post is getting better and better. In a while I think you’ll have to make a new post that summarizes the comments and new information. Hopefully, I’ll have something to contribute but as August is hectically busy for me, it won’t be until September. Perhaps you could make a post with a list of all the questions we should ask the sales staff. It would be very useful for me in September.
Definitely! I will ask our guy as many of the questions as I remember, then write another post ๐
When we built our house, solar panels were an option. However, my job was extremely busy, and I couldn’t allocate the time to research the ins and outs. As such, we opted not to have them installed.
One of the problems with things like solar is there’s a huge industry lobby paired with environmentalists who want to spread the new technologies. However, they usually aren’t as fully developed as portrayed.
I finally got around to getting some information about solar panels at the local store and they are coming around on Saturday to check our roof so they can give us a proper quote. But the preliminary information lines up almost exactly with what you said in the above post. I’m in Okinawa. Regarding installation we were told about 2 million yen for a 56 kw system (Sharp) and it would probably earn about 170,000 per year (not maximum). That is selling all of our electricity. We would still need to pay for our electricity. He said the panels have no real maintenance costs. Typhoon damage is covered. If our panels come off the roof because of the typhoon they will replace/repair them but we have to use our regular home insurance to pay for any damage we might have caused to someone else’s property.
This is all very interesting,
I am very curious about solar in Japan and how it is different from back home (AUS)
Most of the brands I am un aware of or more to the point have not seen any technical data on.
The Feed in tariffs (money paid for electricity sold) here is quite generous.
Just walking around and looking at peoples roof tops I am surprised by the amount of external cabling.
I know back home there is a vast gamut of installers from the highly ethical, attention to detail, customer focused companies/installers to straight up con artists who do substandard work with little after market support (there is a great page on face book called crap solar)
I would love to see an installation done or even see a sales presentation ๐
What are some of the better brand panels, inverters & batteries over here?
are you offered online monitoring of your production and consumption?
Are the companies that selling the systems also the same that install or is this outsourced (or a mixture depending on the company)
warranties are usually a bit to get your head around (panels may have a product warranty as well as a performance warranty) (some inverters have parts and labor split to different amounts as well)
So many questions ๐
Great post, and interesting comments!
I’m not sure there is much in English. Mark’s blog is good on general eco-building etc.
http://www.retirejapan.info/blog/category/mark-brierley
And then there are quite a few websites/blogs in Japanese on all things solar.
Let us know if you figure it out (guest post?) ๐
Hi
Great article.
We recently bought a place in Hachioji, as well as an electric car (Leaf 2018).
Next step is to get quotations for solar panels.
I’d like to get a few quotations, from a few different companies.
My lack of Japanese prevents me from these finding firms.
Can you help?
I will also inquire with some of my neighbours, who have panels installed as well; to find out prices, but mainly to ask their experience with the company.
Thanks
Rob