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【METI Mobile】New incentives to popularize renewable energy

Photo: Ground-mounted solar panels

Japan’s Cabinet approved a bill to revise the feed-in tariff (FIT) law(*) on February 9, 2016. Under the FIT system, power companies buy electricity generated from renewable sources, such as solar power, at fixed prices. The Ministry of Economy, Trade and Industry (METI) has been working to revise FIT rules to expand low-cost renewable energy offerings, advance technology and promote sustainable development.

Certification changes

From the beginning of the program in FY2012 to the end of FY2013, 1.17 million proposed plans were certified as eligible. However, at least 360,000 certified plans (30 percent) never generated any electricity. The revised system will require a full review of both the business plan and electric company contract to ensure that only productive plans receive certification.

More bidders, lower costs

Households and companies cover the costs of the FIT system through their electric bills. In Japan, each household contributes approximately 5,700 yen a year, which totals 1.3 trillion yen across all of Japan. The revised rules will reduce costs by introducing a new competitive bidding system to determine FIT prices.

Promoting non-solar renewables

Many solar panels have been installed thanks to the FIT system. However, there has been slower adoption of renewable energy from sources such as geothermal power, wind power, hydroelectric power, and biomass power. Since installation can take time, many companies currently hesitate to invest. To encourage greater development, another system revision will set purchase prices for non-solar renewables?which have previously been annually determined?in advance for several years.

This amendment will be deliberated during the ordinary session of the Diet.

(*)the Act on Special Measures Concerning Procurement of Electricity from Renewable Energy Sources by Electricity Utilities

Last updated: 2016-03-29
Ministry of Economy, Trade and Industry
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