TOKYO, Aug. 24 (UPI) -- Passage of Japan's renewable energy legislation could drive up investment in the sector, experts say.
The bill, passed in Japan's lower house of Parliament Tuesday and expected to be approved by the upper house this week, would introduce a feed-in tariff incentive scheme that guarantees renewable energy generators above-market rates for the power they produce, Business Green reports.
It would also make legally binding the Japanese government's internationally stated goal of slashing greenhouse gas emissions 25 percent against 1990 levels by 2020.
"By introducing feed-in tariffs, Japan is a step closer toward increasing the share (of) its renewable energy fuel mix," Yvo de Boer, KPMG's special global adviser on climate change and sustainability and former executive secretary to the U.N. Framework Convention on Climate Change, told Environmental Finance.
Such schemes "have proven to be one of the most effective instruments to stimulate development of renewable energy around the world, increasing expected returns on renewable energy investment," he said.
Before the Fukushima nuclear power plant disaster, nuclear systems accounted for 30 percent of Japan's energy and the government had planned for 50 percent reliance by 2030.
A recent poll released by The Mainichi Daily News indicated 74 percent of Japanese in favor of a gradual phase out of nuclear power plants with 11 percent wanting an immediate end to nuclear power and 13 percent saying there was no need to alter policy.
In a May speech, Japanese Prime Minister Naoto Kan said that in about 10 years, Japan should get 20 percent of its energy supply from renewable sources, more than double its current share. By 2020, he said, solar power should cost one-third of its current cost and drop down to one-sixth by 2030.
Steve Sawyer, secretary-general of the Global Wind Energy Council, said of the legislation, "I think this is the strongest signal, on top of Prime Minister Kan's announcements in recent months, of support for renewable energy from the Japanese government, perhaps ever; and this, combined with the public rejection of nuclear, public support for renewable energy and various private sector initiatives, mean that there is more of an opportunity for investors in Japan than ever before."
Solar generation has a generation cost of 60 cents per kilowatt hour, compared with nuclear power, which costs 6 to 8 cents per kilowatt hour, says Japan's Ministry of Economy, Trade and Industry.
While Japan is the second-largest maker of solar panels, behind only China, much of the output is exported.
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