Under the feed-in-tariff system introduced in July 2012 by the then Democratic Party of Japan administration, the nation's major power companies are required by law to buy, in principle, all the electricity generated by solar, wind, geothermal and medium-to-small-scale hydro-power sources and biomass at fixed prices.
The purchase costs are to be added to electricity charges. It was hoped that the system would help revitalize local economies and reduce Japan's dependence on nuclear power. Recently, however, one power company after another has announced a decision to stop such purchases.
They say the oversupply of green electricity due to the required purchase of all such power could wreck the stable supply of electricity to businesses and households.
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