Cabinet approves solar-power auctioning in shake-up of sector

Bloomberg

The Cabinet on Tuesday approved changes to the country’s incentive program for clean energy, including the introduction of auctions for solar projects in an overhaul of the program that is almost four years old.

Prime Minister Shinzo Abe’s Cabinet agreed to amend the law on which the incentive program is based. Solar auctioning was among a number of options under consideration by a panel set up by the Ministry of Economy, Trade and Industry.

Countries such as Germany and India have introduced auctioning for solar as a way to cut power costs through competition and rein in installations. Since Japan introduced its feed-in tariff program in 2012, solar has accounted for most of its clean energy additions.

“The overhaul was intended to introduce clean energy as much as possible while reducing the burden on power users and achieving our target for power generation,” said Minister of Economy, Trade and Industry Motoo Hayashi.

The government projects renewables will provide as much as 24 percent of the nation’s power supply in 2030, according to a plan announced in July.

The changes to the law need to be approved by parliament. The trade ministry, which oversees the incentive program, expects the revisions to become effective in April 2017.