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ARTICLE · 21 AUGUST 2012

Japan's New Feed-In-Tariff System For Renewable Energy

Jones Day
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Effective July 1, 2012, Japan implemented a new feed-in tariff system pursuant to the Act on Special Measures Concerning the Procurement of Renewable Energy by Operators of Electric Utilities, also known as the "FIT Law," enacted on August 26, 2011.

JapanEnergy and Natural Resources

Effective July 1, 2012, Japan implemented a new feed-in tariff system pursuant to the Act on Special Measures Concerning the Procurement of Renewable Energy by Operators of Electric Utilities, also known as the "FIT Law," enacted on August 26, 2011. Under this new system, power utilities in Japan are required to purchase electricity from renewable energy sources generated by certified facilities. The Ministry of Economy, Trade and Industry sets the applicable purchase price and purchase period for each type of renewable energy on an annual basis, taking into account the cost of supply and appropriate return to the power generators.

The initial purchase price for large-scale solar is 40 Yen (0.5 USD)/kWh and for large-scale wind is 22 Yen (0.275 USD)/kWh, in each case for a 20-year purchase period. These prices are among the highest in the world, reflecting both the initial high cost of implementing a renewable energy project in Japan and the desire of the Japanese

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