Renewable Energy Policy Experience Lessons for Japan

The document identifies five key realms for renewable energy policy: direct purchase mandates, improving the business case through financial incentives, removing non-price barriers, supporting research and development, and addressing grid intermittency. It recommends that Japan maintain its generous feed-in tariffs, expand demand response, and unbundle transmission from generation to increase competition. The report provides detailed international case studies from the US, Germany, and other nations to illustrate effective mechanisms such as Green Banks, loan guarantees, and carbon taxes.

• Japan's current feed-in tariff (FiT) is among the most generous globally, with guaranteed rates between 25.20 and 57.75 yen ($0.32-0.73) per kWh. The Ministry of Economy, Trade, and Industry expects this to increase renewable energy by 32-35 million kW by 2020 and spur at least $9.6 billion in solar investment.
• To improve market access for renewable producers, Japan is implementing 'Ownership Unbundling,' requiring large power producers to sell transmission assets to separate companies. This is intended to remove guaranteed grid access for vertically-integrated utilities.
• The report recommends that Japan establish an independent grid balancing authority to manage generation and transmission at regional and national scales, which would allow the country to balance across wider geographies and leverage diverse weather patterns to reduce intermittency.
• Effective financial support for renewables should be predictable and bankable. The report suggests that if price supports are adjusted, changes should follow a well-defined schedule announced at least two years in advance.
• Direct support and rebates are identified as more efficient than tax credits. Direct support reduces risk for the private sector, while rebates reduce risk for the government by ensuring project completion.
• The report suggests a 'green-yellow-red' project checklist to streamline non-price barriers. 'Green' projects would be guaranteed siting, permitting, connection, and power purchase within three months.
• Government support for clean energy research, development, and demonstration (RD&D) should ideally equal 1% or more of a nation's annual energy bill. Japan spent $3.9 billion on energy RD&D in 2008, but only 5% of that was allocated to renewables.
• Carbon taxes create a 'virtuous cycle' by internalizing fossil fuel externalities and using the resulting revenue to fund renewable energy deployment and research.
• Loan guarantees are most effective for low-risk, capital-intensive projects with proven technology and existing private investors, rather than speculative investments.
• Demand response can significantly reduce electricity costs by allowing operators to control load. In the US PJM region, the introduction of demand response resources contributed to an 85 percent price decline in capacity pricing.

APA

Aggarwal, S., Kotin, A., & Harvey, H. (2012). Renewable Energy Policy Experience Lessons for Japan. Energy Innovation. https://energyinnovation.org/wp-content/uploads/Renewable-Energy-Policies-Japan.pdf

Chicago

Aggarwal, Sonia, Adam Kotin, and Hal Harvey. Renewable Energy Policy Experience Lessons for Japan. Energy Innovation, 2012. https://energyinnovation.org/wp-content/uploads/Renewable-Energy-Policies-Japan.pdf.

Wikipedia

{{cite report |last1=Aggarwal |first1=Sonia |last2=Kotin |first2=Adam |last3=Harvey |first3=Hal |title=Renewable Energy Policy Experience Lessons for Japan |publisher=Energy Innovation |date=September 2012 |url=https://energyinnovation.org/wp-content/uploads/Renewable-Energy-Policies-Japan.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{aggarwal2012renewable, author = {Aggarwal, Sonia and Kotin, Adam and Harvey, Hal}, title = {{Renewable Energy Policy Experience Lessons for Japan}}, institution = {Energy Innovation}, year = {2012}, month = sep, url = {https://energyinnovation.org/wp-content/uploads/Renewable-Energy-Policies-Japan.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }