A feed-in tariff system to accelerate investment in renewable energy sources started on July 1. It is hoped that it will lead to the establishment of renewable energy facilities across Japan, thus helping revitalize local economies and reduce Japan's dependence on nuclear power.
Under the system, the nation's major power companies have to buy in principle electricity generated by solar, wind, geothermal and medium- to small-scale hydro power and biomass at fixed prices for up to 20 years. For example, the prices per kWh and the purchase periods are ¥42 for 20 years for a solar power facility with the output of 10 kW or more, ¥57.75 for 20 years for a less than 20 kW wind power facility, ¥42 for 15 years for a less than 15,000 kW geothermal facility, ¥25.2 for 20 years for a more than 1,000 kW hydro power facility and ¥17.85 for 20 years for biomass using waste materials.
In fiscal 2010, renewable energy including large-scale hydro power accounted for only 11 percent of Japan's total power generation. The government plans to raise that percentage to a maximum 35 percent in fiscal 2030. To achieve the goal, electricity generated by solar, wind and geothermal power must increase 20 to 30 times.