Renewable Energy Bill Passes Japan’s Lower House of Parliament

Japan’s lower house of parliament approved legislation to subsidize electricity from renewable sources as the country reduces its dependence on atomic energy after the Fukushima nuclear crisis.

Passage of the bill, which now goes to the upper house, sets the stage for Prime Minister Naoto Kan to leave office this month and the ruling Democratic Party of Japan to choose his successor. Kan’s popularity has fallen over his handling of the earthquake, tsunami and nuclear disaster and he pledged to step down once the Diet approves his legislative agenda.

The legislation requires utilities to buy electricity generated by geothermal, solar and wind sources at above-market rates in order to stimulate investment in renewable energy, which accounts for 9 percent of Japan’s power supply. Solar panel manufacturers like Kyocera Corp. (6971) and geothermal plant developers including Fuji Electric Co. may benefit from the subsidies, known as feed-in tariffs.

Kan last month called for phasing out atomic power after the March earthquake and tsunami caused the worst nuclear disaster in 25 years.

To contact the reporters on this story: Chisaki Watanabe in Tokyo at cwatanabe5@bloomberg.net;

To contact the editors responsible for this story: Reed Landberg at landberg@bloomberg.net; Peter Hirschberg in Hong Kong at phirschberg@bloomberg.net

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