NGK Insulators Ltd. and a group led by Sumitomo Electric Industries Ltd. have been picked for a project aimed at reducing the cost of storage systems that can help integrate clean energy onto the grid.

The government will pay the companies as much as 75 percent of development costs, the Ministry of Economy, Trade and Industry said in a statement Thursday. The Sumitomo group and NGK will work separately on two different technologies.

"We expect renewable energy to expand once the price of storage batteries becomes lower and installations increase," NGK said.

Japan is promoting energy storage amid an increasing need to improve power grids to deal with intermittent power from the sun and wind after introducing an incentive program last year. Prime Minister Shinzo Abe's government is also pushing storage batteries for export. The government has set a goal of cutting the cost to install systems to store excess energy from renewable sources to ¥23,000 ($234) per kilowatt hour within seven years. That's the same as the average cost for pumped hydropower.

Participants will receive financial support for five years through March 2018, according to the ministry's website. They'll be asked to return part or all of the subsidies depending on their progress by March 2021. The ministry has set aside ¥2.7 billion for the fiscal year through March 31 for the project, ministry official Takatsune Ito said last week.

A ministry report released last year said sodium-sulfur batteries, the type made by NGK, cost ¥40,000 per kilowatt hour.