Bloomberg News

Japan Benefits as Latecomer Offering Solar Subsidies, Ueta Says

October 17, 2012

Japan has an advantage as a “latecomer” introducing incentives to promote renewable energy investments, the chairman of a government panel overseeing the setting of rates for clean energy said today.

“Being a latecomer, we can introduce solar power with more advanced technologies,” Kazuhiro Ueta, head of the five-member panel that sets Japan’s feed-in tariffs, said at a symposium on solar energy in Tokyo today.

Japan can learn from countries such as Germany and Spain, which have already implemented the premiums, said Ueta, who is also professor of environmental economics at Kyoto University.

Tokyo introduced the world’s highest feed-in tariff, or fixed-premium rate, for power from solar plants in July to boost output and accelerate the nation’s shift away from nuclear following the Fukushima disaster. The program requires utilities to buy clean energy at higher rates with added costs passed on to consumers as surcharges. The feed-in tariff for solar is 42 yen per kilowatt-hour for 20 years.

In Germany, Chancellor Angela Merkel’s government plans to cap renewable-energy subsidies when capacity reaches national targets. Guarantees of above-market prices for clean energy in Germany have helped make the country the biggest market for solar and have been emulated around the world, spurring a boom in renewable energy in nations including Italy and Spain.

Japan’s Ministry of Economy, Trade and Industry projects the nation will add 2,000 megawatts of solar capacity by the end of March. In the six months since April, 885 megawatts of solar were added, it announced last week.

The panel headed by Ueta makes recommendations on the appropriate level of the tariffs, which are set annually, or every six months if necessary. The panel’s recommendations are sent for approval to the industry minister.

To contact the reporter on this story: Chisaki Watanabe in Tokyo at cwatanabe5@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net


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