The government will require utilities to purchase surplus electricity generated from solar power systems at a predetermined price for 10 years, possibly as early as this year.
In an effort to encourage use of renewable energy sources and stimulate the flagging economy, the government will introduce a “feed-in” tariff scheme under which owners of solar power systems connected to the grid will be paid a premium rate.
The Ministry of Economy, Trade and Industry said Tuesday it is considering initially setting the rate at around ¥50 per kilowatt hour for extra power produced by a household equipped with a photovoltaic power system, up from the average of ¥24 such energy currently goes for on the market.
The new system will help households, companies and public facilities recover the initial cost of installing solar power systems, METI officials said.
But on the other hand, it will lead to an increase in electric bills for customers without such facilities, because utilities will pass on the higher cost of purchasing the power.
The government hopes to limit the increase in electricity bills to less than ¥100 per month on average, which is cheaper than in Germany, the world’s front-runner in using feed-in tariffs, the officials said.
The premium rate has been decided to enable customers who have set up solar power systems to recover their initial expenses over 15 years, according to the officials.
If solar power becomes more popular, the setup cost of ¥2.5 million on average for a household will decrease, so the premium rate will also likely become smaller in stages, they said.
To achieve the purchasing system as soon as possible, METI plans to propose necessary legal changes to the Diet during the current session, the officials said.
The introduction should be made by fiscal 2010 at the latest, they said.
“The next three to five years will be critical to improve the price competitiveness of solar power,” METI chief Toshihiro Nikai said at a news conference. “To do this, we have to secure participation, understanding and cooperation of all the people” as the system will also be important to fight climate change.
Nikai said he informed the Federation of Electric Power Companies of Japan about the plan in the morning.
In a meeting with Nikai, federation head Shosuke Mori said the power industry will cooperate for the establishment of the purchasing system, according to the federation.
Germany has unseated Japan as the world’s top solar power producer, encouraged by the introduction of the purchasing scheme for renewable energy sources in the 1990s.
In recent years, Europe’s annual production of solar cells has been expanding at a rapid pace, threatening Japan’s strong presence in the global market.
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