A government panel proposed Wednesday that utilities pay ¥42 per kwh for solar power supplies in a renewable energy incentive scheme, a rate that could encourage investors to enter the nascent market.
Under the proposal drafted by the panel, the Ministry of Economy, Trade and Industry will introduce the new feed-in tariff scheme in July.
The panel recommended in a draft document that utilities pay ¥42 per kwh for solar supplies over 20 years. It also wanted utilities to pay ¥23.1 per kwh for wind power supplies coming from units with 20-kw capacity or above over 20 years, and ¥27.3 per kwh for geothermal power coming from units with 15,000-kw capacity or higher over 15 years.
The panel also recommended utilities pay a rate that falls between ¥30.45 and ¥35.70 for hydroelectric supplies, depending on the size of the facilities’ output. The proposed rates all include the 5 percent sales tax.
Renewable energies generated by private households would be levied over a contract period of 10 years.
The proposed preferential rate was roughly in line with an earlier request from the industry.
Commercial users currently pay a preferential rate of ¥13.65 per kwh for solar power supplies. While the introduction of higher prices and long-term contracts is expected to encourage greater investment in renewable energy, it is also likely to come at a greater cost to consumers, to whom the utilities will ultimately pass on the burden.
Tepco plan to hit homes
Tokyo Electric Power Co. will submit a special long-term business plan, including a 10 percent power rate hike for households, to the government Friday, sources said.
The plan, to be presented jointly by the Nuclear Damage Liability Facilitation Fund, will also feature measures to reduce ¥3 trillion in Tepco’s costs over 10 years and capital infusion of ¥1 trillion in public money into the utility.
The plan is a prerequisite for government approval of additional financial support for the company, which is struggling due to heavy costs caused by the Fukushima No. 1 nuclear crisis.
Industry minister Yukio Edano will examine the plan to see whether Tepco will take the appropriate steps to ensure compensation payments to victims of the crisis and stable supply of electricity.
The plan will call on creditors to maintain the current balance of loans and extend an additional ¥1.07 trillion in fresh loans.
As measures to improve profitability, the plan will include a power rate hike for households from July and the restart of halted nuclear reactors at the Kashiwazaki-Kariwa plant in Niigata Prefecture.