Japan Announces Huge New Incentives for Solar Power

Japanese consumers who decide to install solar panels will be able to sell the power they generate at a big premium.

The nuclear meltdown in Fukushima last year was a disaster in every sense of the word, and a reminder of just how dangerous nuclear power can be. But if anything good comes out of it, it might be this: In an effort to move away from nuclear power, Japan announced big, big plans this week to incentivize solar power.

Before the meltdown, atomic energy provided about 30 percent of Japan’s power, but now, post-meltdown, even the prime minister realizes that the country needs to decrease its reliance on nuclear power. Taking a page from Germany’s book, Japan’s government is sharply increasing the amount that utilities must pay consumers who generate solar power, a subsidy that is expected to rejuvenate the country's struggling solar industry.

Japanese consumers who decide to install solar panels will be paid roughly 53 cents per kilowatt-hour of solar power that they produce. (To put that number into context, it's about twice as high as the subsidy rate in Germany, which has long been the world leader in solar power). Bloomberg New Energy Finance estimates that the subsidy will encourage consumers to invest up to $9.6 billion in solar power, leading to new solar output equivalent to not one, not two, but three nuclear plants. In other words, the subsidy will make solar power more profitable for both consumers and solar companies, likely making Japan the world’s second-largest market for solar power.

The solar price hike does have its downsides. Most notably, all consumers will have to pay for it in the form of monthly surcharges, which probably means that those who don't install solar panels will be subsidizing those who do. But if a recent survey of U.S. consumers is anything to go by, perhaps Japanese consumers will end up supporting the push for renewable energy, despite the surcharges—especially if it means avoiding another nuclear disaster.

Photo via Wikimedia Commons


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