To combat global warming, the government has a middle-term goal of reducing greenhouse gas emissions by 15 percent by 2020 from 2005 levels. To achieve this goal, it will be important to spread the use of renewable energy. As part of this effort, the government plans to increase solar power generation output by around 20 times by 2020 from current levels. In January, it resumed subsidies to households that have installed solar panels, after it had stopped such subsidies in 2005.
A standard solar panel, with an output of 3.5 kW, costs about ¥2 million, including the cost to set up the panel. The central government provides a subsidy of ¥70,000 for each kW. Many local governments are also offering subsidies.
At present, power companies buy surplus power from solar power generation at ¥24 for each kW. To promote solar power generation, a panel of the Ministry of Economy, Trade and Industry has decided to raise the price of surplus power from solar power generation to ¥48 per kW. Within this year, power companies will start buying such surplus power at the new rate not only from households but also from business enterprises, schools, hospitals, etc.