The prices paid by power suppliers to buy electricity generated from renewable energy sources under a feed-in tariff system should be revised to ensure fairness, the Japanese government said in an annual report Friday.
The purchase prices should be regarded as “public utility charges” that require “fair and adequate revision,” the white paper on the country’s economy and public finances said.
Under the system to promote the use of renewable energy, power utilities are required to buy all electricity generated from renewable energy sources and pass on the cost to their customers.
Customers thus have to pay higher prices for electricity. There are concerns that electricity rates for consumers will continue to rise as the use of relatively expensive renewable energy becomes more widespread.
The first such purchase program was introduced in 2009 for surplus electricity generated from home-use solar power panels. In July, it was expanded to cover all renewable energy, including solar power from large-scale generation systems, wind power and geothermal energy.
For solar power, the purchase price for electricity suppliers is currently set at 42 yen per kilowatt-hour. As a result, the electricity bill of an average household is expected to rise by around 80 yen per month.
According to the white paper, the estimated average return on investments in solar power generation under the existing scheme is as high as 8.6 pct. This means that individuals who own homes with solar panels can pay off their initial investments of some 500,000 yen in about 10 years.