Japan to Boost Clean-Energy Capacity 13% Using Price Incentives

Japan will boost renewable-energy capacity by about 13 percent through the year ending March 2013 after it begins a price incentive program for generators this July, the Ministry of Economy, Trade and Industry said.

Japan will add 2,500 megawatts of clean energy including solar and wind in the fiscal year, the ministry said today. The country currently has a capacity of 18,750 megawatts.

Utilities must pay above-normal rates to renewable energy producers under the incentive program. Costs will be passed onto power users as a surcharge of as much as 0.4 yen (0.5 cent) a kilowatt-hour, the ministry said. An average household will pay as much as 100 yen a month for the surcharge, it said.

Estimates were issued today at a meeting of a panel to set tariffs for solar, geothermal, wind, biomass and hydropower. The five-member panel led by Kazuhiro Ueta, environmental economics professor at Kyoto University, will today submit recommendations to Industry Minister Yukio Edano, with approval expected next month. The solar rate was 42 yen a kilowatt-hour for 20 years.

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

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net