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People are snatching up hybrid cars, solar panels and energy-efficient TVs, wooed by government incentives designed to battle a recession while conserving energy.

Tax breaks and rebates on low-emission cars have helped two hybrid vehicles, Toyota’s Prius and Honda Motor Co.’s Insight, become the best-selling models in Japan the last two months. Likewise, consumers are buying up environment-friendly electronics products to earn Eco-points that the government has promised can later be converted into products or other deals that have yet to be announced.

The renewed consumption is giving struggling corporations and the sagging economy a much-needed jolt — although some economists wonder if the demand created by the incentives will run out of steam.

Car dealership owner Hiromi Inoue can barely contain his glee over the thousands of Prius orders coming into his Toyota showrooms in Tokyo, now making up more than half their sales.

“What we’re seeing is extraordinary,” he said.

The automakers could use some help: vehicle sales in Japan dropped to their lowest level in three decades last year, and Toyota Motor Corp. sank into its worst annual loss since its 1937 founding.

Under a new government program, hybrids are now tax-free, delivering savings of about ¥150,000 for a Prius buyer. Other fuel-efficient models qualify for lower savings.

Also helping is a “cash-for-clunkers” program similar to the plan initiated by U.S. President Barack Obama. People who trade in a car 13 years or older get a ¥250,000 rebate for buying a low-emission model. Those without a trade-in get ¥100,000.

Koji Endo, auto analyst with Credit Suisse, expects green incentives to lift annual vehicle sales by 100,000 vehicles or more.

The green boom has also caught on in electronics.

People who buy certain types of energy-saving TVs, refrigerators and air conditioners earn Eco-points that they hope to exchange for other products later.

“Everyone — families, old people, young people — are coming to buy TVs,” said Junichi Yajima, a sales clerk at a Bic Camera retail outlet. “Some people don’t understand Eco-points, but they’ve heard about it and see it as a good opportunity.”

Yajima says each Eco-point will likely be worth about ¥1, and the points range from 7,000 for a flat TV with a 26-inch screen or smaller to 36,000 points for a 46-inch model or larger.

Electronics sales shot up 50 percent on year during the mid-May week after Eco-points started, according to the Ministry of Economy, Trade and Industry. Researcher Gfk Marketing Services Japan said sales of flat-panel TVs were up 60 percent from a year earlier.

“We don’t know what Eco-points are yet, so we’re also looking at features and prices,” said 40-year-old housewife Kaori Kawabata, shopping for a flat-panel TV with her husband at a bustling Bic Camera store.

Government incentives like Eco-points highlight this export-reliant nation’s efforts to lift domestic consumer spending.

The top electronics makers, including Sony Corp. and Panasonic Corp., rake in much of their profits from overseas sales, which have been hammered by the global slump.

Household spending has been lagging for months, as the unemployment rate surged to a six-year high of 5 percent and companies slash summer bonuses.

Another area the government hopes to nurture is solar energy. Japan is home to leading solar panel makers, including Sharp Corp., Kyocera Corp. and Sanyo Electric Co.

The government wants to lift the global market share of Japanese makers to a third by 2020 from a quarter at present, with hopes of adding 110,000 jobs and growth worth ¥10 trillion to the economy.

Since January, the government has been offering ¥70,000 per kilowatt, which delivers about a 10 percent savings for panel installment costs. Some 33,700 homes have applied for the solar subsidies.

Separately, the Diet is hammering out a law to give more money to households for buying back electricity from solar-powered homes.

Hiroshi Watanabe, an economist at Daiwa Institute of Research, said such incentives help keep some spending going in a troubled economy, but they may not have a lasting impact. As long as incomes don’t improve, they aren’t real fixes.

“Whenever there is a major rise in demand like this, there is sure to be a backlash in plunging demand later on because demand was just moved up in time,” he said.

Watanabe also said the frantic bargain-hunting merely shows people are pinching pennies because they’re worried about the economy.

Sadami Nakamura, 64, who works for an insurer, was standing in a long line at a Tokyo ward office to get rebate coupons, part of a new regional government program to stimulate spending, which will give her a 10 percent discount at some stores.

“I don’t agree with this kind of program,” she said, dismissing it as “a handout.” “But since they’re offering it, I’m going to take it.”

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