What happens to solar from here?

← Back to the entry point (all 19 questions)

It still grows. Curtailed electricity grows too, but not every year — it moves with the weather and with nuclear.

2.5–3.6× by FY2040

The 7th Strategic Energy Plan (February 2025) puts solar at 23–29% of all electricity in FY2040. In generation terms that is 2.5–3.6× the FY2023 level. Next-generation cells that can be applied to roofs and walls (perovskite) carry a target of roughly 20 GW by 2040, with plans to establish GW-scale production by 2030.

Curtailment has spread across the country

When solar exceeds midday demand, it is curtailed (output curtailment). This began in Kyushu in 2018, and on 1 March 2026 it was carried out in the Tokyo area for the first time — giving all ten areas a track record. Tokyo's first instance ran from 11:00 to 16:00. TEPCO Power Grid's instructions ran from 30 MW to 1.18 GW by block, and the published total curtailed volume was 1.84 GW (the two use different aggregation methods).

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Fig. 1 — Share of solar and wind curtailed by area (%). Kyushu is highest, with an FY2025 forecast of 6.1%. Tokyo curtailed for the first time on 1 March 2026. Source: Agency for Natural Resources and Energy, 8th Next-Generation Power Grid WG, Material 1, 16 March 2026.

It does not rise every year

In its March 2026 materials the Agency for Natural Resources and Energy writes that while renewable capacity expands year by year, curtailed volume does not necessarily increase every fiscal year. It moves with weather, demand, nuclear inspection outages and thermal operation. Kyushu fell from 8.3% (1.29 TWh) in FY2023 to 4.8% (750 GWh) in FY2024, with 6.1% forecast for FY2025. The same materials also note that fine weather raised national curtailed volume above the usual level this past winter.

The 2034 outlook: Hokkaido 30%, Kyushu 22%

Each network company publishes an annual long-term outlook for operators under the unlimited, uncompensated curtailment rule. The June 2025 outlook (on FY2024 actuals, assuming 2034 installed volumes) gives Hokkaido 30%, Kyushu 22%, Tohoku 16%, Chugoku 16%, Hokuriku 10%, Shikoku 10%, Kansai 9%, Chubu 6% and Tokyo 2%. These are estimates, not guaranteed ceilings. Areas that curtail a lot are areas with a lot of room to store.

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Fig. 2 — Outlook for curtailment rates in 2034. Hokkaido and Kyushu reach 20–30%. These are estimates, not guaranteed ceilings.

Abroad, negative prices are multiplying

In Germany, the hours in which wholesale power prices go negative at midday, when solar is in surplus, rose from 301 in 2023 to 457 in 2024 and 573 in 2025. Those are hours when a buyer is paid to take electricity. Japan's curtailment and Germany's negative prices are two expressions of the same surplus, and both indicate how much electricity can be stored cheaply at midday.

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Fig. 3 — Germany's annual negative-price hours, rising as solar grows.

How an investor should read this

Curtailed electricity is, for a battery, electricity that can be stored cheaply. The spread in curtailment rates between areas — Kyushu 6.1%, Tohoku 2.2%, Hokuriku 2.1% (as a share of what could have been generated) — feeds through to the spread in arbitrage earnings by area. It does not translate proportionally, however: arbitrage is set by the wholesale price differential and by how the unit is operated. Because curtailed volumes move up and down year to year, the correct premise is to model arbitrage not as revenue that grows every year but as revenue that moves with the weather and with nuclear (48-16). The direction set by the 7th Plan is solar generation at 2.5–3.6× its FY2023 level by FY2040.

The questions in this series

I. Why the grid ran without batteries in the past

II. Why thermal, nuclear and pumped storage are not enough

III. Where demand and the generation mix are heading

48-10Why do data centres point to batteries?
48-11What happens to solar from here? (this article)
48-12Thermal volume, nuclear operation, demand — what next?
48-13How much battery capacity is actually coming?

IV. The money, and what the state really wants

The one question beyond the 1848-20 What do you pay, and what comes back?The answer differs by project, so we have built a calculator whose dials are made only from published figures. You can move unit price, clearing rate, seat fee, arbitrage spread and construction cost yourself.

Sources

7th Strategic Energy Plan, Cabinet decision of 18 February 2025 (solar 23–29% in FY2040, 2.5–3.6× FY2023)
METI, "Next-Generation Solar Cell Strategy," 26 November 2024 (perovskite, approx. 20 GW by 2040)
Agency for Natural Resources and Energy, 8th Next-Generation Power Grid WG, Material 1, 16 March 2026 (curtailment rates by area; Tokyo's first curtailment)
TEPCO Power Grid press release, 1 March 2026 (11:00–16:00; instructions of 30 MW–1.18 GW); Nikkei BP Mega Solar Business, March 2026 (actual 1.84 GW, TEPCO PG published figure)
Agency for Natural Resources and Energy, 3rd Next-Generation Power Grid WG, Material 1, "Long-Term Outlook for Renewable Output Curtailment," 27 June 2025 (2034 curtailment-rate outlook; actuals by area); 8th meeting of the same WG, Material 1, 16 March 2026 ("does not necessarily increase every fiscal year"; this winter's increase)
Bundesnetzagentur press releases, 3 January 2025 and 4 January 2026 (negative-price hours 301 → 457 → 573)

Supervised by

Shinya Nakashima(Representative Director, Science X Inc.; Ph.D. in Engineering)

Works on the development, sale and technical due diligence of grid-scale battery storage plants. This column is written and supervised on the basis of hands-on transaction and evaluation practice.