The Japanese government has decided to relax the conditions for cutting solar power subsidies for projects that have not started operations following opposition from power producers and other firms.
The Economy, Trade and Industry Ministry in October had proposed that companies granted permits for solar projects between the fiscal years of 2012 and 2014 under the so-called Feed-In-Tariffs (FIT) system that guarantees minimum power prices submit applications by March 2019 to connect to the grid.
But the proposals had angered power producers and investors who say the cuts will undermine their profitability and violate earlier agreements.
Following the opposition, the economy ministry late on Wednesday said it would delay the deadline for submission of applications for at least 2 megawatt projects to the end of September. The deadline for the start of operations was also delayed by six months to the end of September 2020.
Companies that miss the deadline will see their price guarantees under the tariffs of ¥32 to ¥40 yen per kilowatt hour (kWh) cut to ¥21 per kWh.
The economy ministry estimates show the subsidy cut could affect 23.5 gigawatts of solar capacity, or nearly 44 percent of the amount the government approved in the three-year period after the FIT scheme was created in 2012.
The ministry has said the cuts are necessary to reduce the public burden of FIT subsidies, which are added to consumers’ bills.
At the same time, the ministry is likely unhappy with the amount of unfilled permits. Speech