Since the introduction of the Japanese feed-in tariff policy for renewable energy in July 2012, many firms have entered the Japanese renewable energy market with the focus being on solar generation due to its comparatively low number of barriers to market entry. As of February 2013, approved capacity for large scale solar generation equipment (over 1,000kW) stood at over 6,437 MW from 1,755 applications. Out of this approved capacity, only 69 installations had started operation with generating capacity of 110 MW, representing a small percentage of approved capacity. One reason for this difference is the time necessary for construction, which typically takes between six months to a year. The approved capacity is expected to enter into operation in the coming years.
Such circumstances result in some operators selling all or part of their power generation businesses that have entered into operation or are in the planning stage where approval has been received. For an investor acquiring a power generation business, a business analysis is essential to appropriately assess the business’ value. In addition, because the secondary market in Japan is still in its developing stage, it is necessary for a seller to verify the sales price.
PwC Japan offers an integrated service approach for companies in the renewable energy sector, drawing on the expertise of our accounting, tax, consulting and business valuation specialists who have a multitude of experience in both domestic and international renewable energy projects and funding. We also provide solutions in collaboration with our network of technical and legal professionals.