Japan Clean-Energy Panel Proposes 11 Percent Solar Tariff Cut in 2016

Japan should probably reduce incentives for solar power project developers by 11 percent after costs to roll out solar systems fell, a government-appointed panel said.

Solar tariffs for approved applications could be cut to 24 yen (21 cents) per kWh from the current rate of 27 yen for the fiscal year beginning April 1, according to a proposal presented on Monday by the panel in charge of reviewing Japan’s clean-energy-incentive program.

The panel reviews the tariffs every year as part of the incentive, known as a feed-in tariff, to encourage investments in clean energy. The tariffs are for as many as 20 years, depending on the type of energy. Tariffs for wind, geothermal, biomass and small hydropower would remain unchanged, the panel said.

The proposed solar tariff, which still require trade minister Motoo Hayashi’s approval, is lower than the 26 yen per kWh Bloomberg New Energy Finance had projected.

Lead image: Solar power system in Japan. Credit: Shutterstock.

© 2016 Bloomberg

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