Japan
will
lower the rate for electricity produced from large solar power farms by 10% to
37.8 yen (40 U.S. cents) per kilowatt-hour from April 1.
It will maintain rates for electricity produced from other renewable energy
sources such as wind and geothermal, the Ministry of Economy, Trade and
Industry said in a statement Friday.
The decisions are in line with a proposal made earlier this month by a
government-appointed panel.
The lower rate is unlikely to deter investment in solar farms, because
increasing demand and falling costs will maintain profitability, METI Minister
Toshimitsu Motegi said Tuesday.
Japan
enforced a feed-in tariff law in July 2012 to promote the adoption of renewable
energy. The law requires utilities to buy electricity from renewable sources at
designated prices and for specified durations. The prices are revised
regularly.
Investment in solar farms has since soared, mainly because they don't typically
require environment assessments and can be built over a short period, reducing
investor risk.
In the three quarters ended Dec. 31, the government approved renewable power
projects with capacities of 5.2 gigawatts to be eligible to take part in the
feed-in tariff. Of that approved capacity, 90% is from solar power projects.