Green Rush Hits Japan (Updated Version as of June 27, 2012)

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The government has finally disclosed details of Japan’s version of the Feed-in Tariff (“FIT”) to be enforced this July. The purchase price for the initial year has been fixed at ¥40/kWh ($0.50/kWh excluding tax) for solar power and ¥22/kWh ($0.28/kWh excluding tax) for wind power and the purchase period for the initial year is fixed at 20 years for both. Combined with Green Investment Tax Credit measures, Japan’s renewable energy market is bracing for a “green rush” --- as opposed to a gold rush --- as it attracts wide attention both in Japan and abroad. This article discusses the formal details of the FIT scheme and updates our February and May newsletters on the major points of interest related to Japan’s Green Rush phenomenon.

1. FIT Act

(1) How attractive is Japan’s FIT scheme?

The Act on Purchase of Renewable Energy Sourced Electricity by Electric Utilities (August 30, 2011; Law No. 108), better known as the Feed-in-Tariff Act (“FIT Act”), was approved by the Diet in August 2011 and will be enforced starting in July of this year.

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