One of the key areas of the International Renewable Energy Agency’s (IRENA) programme of work is the analysis of renewable technology costs and performance and the dissemination of these results to as wide an audience as possible. In addition to analysis, IRENA seeks to engage a broad range of stakeholders in the context of this work through the Renewable Costing Alliance. The Costing Alliance brings together companies, industry association, governments and researchers to share, confidentially, data for real-world renewable energy project cost and performance, helping to build further on IRENA’s costing work to date. In this context the authors analyse the current cost differentials and cost reduction potentials for solar PV in Japan compared to best practice levels and identify the reasons for higher costs in Japan and how to reduce them. This study analyses the current installed cost differentials for utility-scale, commercial and residential rooftop solar PV systems. In addition to identifying the reasons for the cost differentials, potential policy recommendations to reduce the cost differential are identified.