Business

Japan to partially end feed-in tariff system for electricity from renewable sources

JIJI

Japan’s industry ministry plans to partially end the country’s feed-in tariff program, under which electricity produced by businesses and others from renewable energy sources — such as from solar and wind — is bought by power suppliers at fixed rates, it has been learned.

To reduce the cost burden on the public, which increased after the program was introduced in 2012, the ministry plans to revise a related law in fiscal 2020 to adopt a competitive bidding system for electricity generated by businesses using large-scale facilities, according to sources with knowledge of the matter.

Under the FIT system, power suppliers pass on their costs for purchasing electricity from renewable energy sources via electricity bills.

The additional burden on households and businesses is expected to reach some ¥2.4 trillion in fiscal 2019.

The planned revision is based on a system in Germany, which is ahead of other nations in promoting renewable energy use, according to the sources.

The ministry hopes to start in-depth discussions on the FIT system overhaul at a meeting of experts within this month, the source said.