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15 March, 2017

National Household Burden for Renewable Energies to Increase by a Factor of 12

On March 14, Japan's Ministry of Economy, Trade and Industry (METI) announced that monthly amounts to be borne by households under the feed-in-tariff (FIT) system would be JPY792 (USD6.95 at USD1=JPY114) in FY17 (April 2017 to March 2018), up from JPY675 (USD5.92) in FY16 (April 2016 to March 2017). The amount will be added to power rates. Annualized amounts will be JPY9,504 (USD83.37), and that change will be applied to power rates starting in May.

In comparison with the monthly amount of JPY66 (USD0.58) in FY12 (April 2012 to March 2013), when the FIT system was launched, the figure has already swollen by a factor of 12. Total purchases of all electricity from renewable energies have reached JPY2,704.5 billion (USD23.72 billion). The total amount to be borne as an addition to power rates by the nation—that is, ordinary people—will be JPY2,140.1 billion (USD18.77 billion), after subtracting what is to be paid by power utilities.

To reduce the national burden, purchase prices were lowered for electricity generated by solar and wind power, but net system energy demand for renewable energies increased as many nuclear power plants were not in operation.

The FIT system is a mechanism whereby power utilities basically purchase all electricity generated by renewable energies at the same price for a fixed period. Households and corporations bear some portion, depending on their use. Electric power consumption by a standard household (reference case) was estimated at 300kWh per month.

As for the purchase price of electricity generated by solar power, a bidding system exists for large-scale generation of 2MW or more. The price is JPY28 (USD0.25) for residential use (less than 10kW) in the three service areas of the Tokyo Electric Power Co. (TEPCO), Chubu Electric Power Co., and Kansai Electric Power Co. (Kansai EP), compared with JPY30 (USD0.26) in other areas. Each is reduced by JPY3 (USD0.026) from FY16.


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