Japan's Ministry of Economy, Trade and Industry (METI) announced on Tuesday that the feed-in tariff for solar power will be reduced from 42 yen/kilowatt hour to 38 yen/kilowatt hour.
Other forms of renewable energy - geothermal, wind, small-scale hydraulic - will remain unchanged at their 2012 rates.
What this means is that a homeowner who has solar panels installed on her roof will pay X to the power company for each kilowatt hour (in Kyoto, 24 yen), and then receive from the power company 38 yen for each kilowatt power the solar panels generate above the amount used.
For example, if the homeowner uses 10 kilowatt hours and the solar panels generate 20 kilowatt hours in a month, she will pay 240 yen (10 hours x 24 yen/hour), and then receive 380 yen (10 hours used - 20 hours generated = a difference of 10 hours x 38 yen = 380 yen).
Early adopters got as much as 48 yen. In our neighborhood in Kyoto, many are receiving 42 yen/hour.
The reasoning for the reduction is that the cost of the panels and installation has gone down, and thus the period it takes to recoup the investment in the panels, etc., will not change. In many cases, that is roughly 12-13 years now with various local and national subsidies calculated in.
The spread of other forms of renewable energy are lagging, so the tariffs will stay at their current rates.
For wind power, the tariff will remain 57.75 yen/kilowatt hour for up to 20 kilowatts generated, 23.1 yen/kilowatt hour for more than that.
For geothermal, the tariff will stay at 42 yen/kilowatt hour for up to 1.5 kilowatts generated, 27.3 yen/kilowatt hour for more than that.
Small-scale hyrdaulic power will receive between 25.2 - 35.7 yen/kilowatt hour.
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