The government is considering reducing incentives for developers of solar power projects by as much as 16 percent to reflect lower operating and maintenance costs.
The tariff for applications approved between April 1 and June 30 could be cut to ¥29 per kilowatt hour from the current rate of ¥32 under a proposal presented Tuesday by a panel in charge of reviewing the country's renewable-energy incentives. The tariff should be cut again to ¥27 per kilowatt hour beginning in July, the panel recommended.
The lower tariff could cool investments in Japan's booming solar market by making it less attractive for developers eager to lock in contracts at some of the highest rates in the world.