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Feed-in Tariff (FIT) is Commencing

Post: Thursday June 14, 2012




FIT for  energy will come into effect as of July 2012.  Electric power providers will be obligated to purchase entire power supplies generated with renewable energy at a fixed rate for a certain time period.


Previously, electric power providers only had to buy “excess power supplies” such as solar power supplies generated by individual homes.  The conditions will now became tighter to add the term “entire” to renewable power supplies including solar power supplies generated by any institutes or persons other than individual homes; which is attracting great attention.


The power supplies subject to the new FIT are five kinds of renewable energy including solar, wind, hydro, geothermal and biomass power, which satisfy certain conditions.


How much is the surcharge?
The exercise price and period were set in April.  For example, 10kw or more of solar power is 40 yen.  While 10kw or less excess renewable power supplies will be sold for 42 yen, which is the same price as in 2011, it is said that solar power generated by individual homes will be sold for the amount equivalent to 48 yen/kwh with aid from the national bounty system.


The cost for FIT will be shared among electric power users widely and lightly.  The share is called a “charge”.  Once the new FIT commences, the electricity charge for the average household that is paying 7,000 yen/month will increase by 70 to 100 yen.  Like the “fuel fees” for air tickets, where airline companies demand customers to share the significant increase of fuel fees, the “charge” of FIT for renewable energy is called “the charge to promote renewable energy production.”


As the movement against nuclear power gains momentum after the Great Eastern Japan Earthquake, the interest in renewable energy is increasing widely and rapidly.  However, it only serves a very small portion of the whole power supplies at this moment.  The FIT may feature as a future trend of renewable power.

This entry was posted in Real Estate News, Recent trend


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