Do Japan’s Feed-In Tariffs for Solar Mean Profits for a Few, Price Hikes for Many?
I was overjoyed to hear that the Japanese legislature has passed a very aggressive plan to rapidly move Japan towards a renewable energy future. In the first year, it is likely to result in the installation of 3-5 GW of photovoltaics, enough to replace 3 nuclear reactors. And growth of the market for PV in Japan will likely undergo exponential growth for years to come.
This growth will come at the expense of 42 yen per KWh. This is the cost that utilities such as ToDen (TEPCO) and KanDen will be forced to pay solar energy producers. Lower feed-in rates are offered for other forms of renewable energy, such as geothermal, wind, hydro, etc. Of course, the utilities are not going to eat the cost of this greener electricity – they will pass it on to the consumer. 42 yen per KWh is about 3 times the going rate for electricity, and well above the actual cost of production.
These feed-in tariffs guarantee huge profits for a select few – major PV manufacturers such as Sharp, Kyocera and Panasonic and the investors who have the capital to invest in solar installations, including Softbank, which is installing Japan’s largest solar plant to date in Hokkaido.
Many people have the mistaken idea that solar energy is expensive. It isn’t the cheapest form of energy out there (hydro and wind are cheaper), but solar energy is now cheaper than nuclear energy. Costs for solar will continue to fall dramatically into the foreseeable future, while costs for non-renewable energy will continue to rise. Five years from now any debate will be decisively settled in favor of renewables purely on the basis of cost efficiency. But the Japanese ratepayers are now locked in to higher prices in exchange for greener energy.
Solar power is inherently one of the most democratic forms of energy production. Compared to wind or hydro, solar energy can be sited almost anywhere. Solar is also easily scalable, so it can be installed on a few meters of roof space or across many hectares of land. I have nothing against solar companies profiting from the shift towards renewable energy. However, as things stand, all we have is a slightly cleaner, greener version of business as usual in Japan. Those who have money to invest will profit, and those who do not will pay the bill.
Exurban homesteader Ken Elwood at Adam’s Guild blog expresses similar reservations about the renewable energy scheme:
Now I’m thinking, it’s actually a most regressive scheme that further traps people into the top-down system. When they say that utilities have to buy alternative electricity, what that actually means is that alternative electricity is obliged to communicate with the grid, and every one has to pay extra for it. It’s essentially a neo head tax. On top of that, the money is not even paid to the government, but to private interests that are using the government to suck the last of the money from everyone.
A True Renewable Energy Revolution for Japan: Power by the People, for the People
I envision a true renewable energy revolution for Japan. One in which clean, safe and inexpensive power is produced by the people for the people. I envision a renewable energy revolution that will show the world that we can power ALL of the world’s energy needs with renewable energy – and that we can do it less expensively than with fossil fuels or nuclear reactors.
Over the last decade, Germany has initiated leadership of the renewable energy revolution and has shown that the technology is ready. Japan has modeled it’s tariffs after this very successful plan, which is a good start.
Yet there is a unique confluence of events that makes Japan the perfect place for the next step in the renewable energy revolution. The tragedy of the Fukushima nuclear accident has galvanized resistance to nuclear power and the energy monopolies that created this mess. 70% of the population opposes restarting the reactors, yet the Japanese government continues forward, leading to a great many questioning whether Japan’s democracy is functioning.
It is time for the Japanese people to take matters into their own hands and do what they do best: cooperative organization.
What I propose is a not-for profit cooperative that will facilitate shifting Japan to 100% renewable energy in two decades or less. We will use volunteer energy, neighborhood and community organizations, the internet, social networks, crowd sourcing and to do it faster, cheaper and more creatively than for-profit corporations could ever dream of doing. We will draw on the united will of the Japanese people to create a world with clean affordable energy – and we will be a model of inspiration for the rest of the world to follow suit.
Over the next few weeks I’ll be posting more about how exactly this can be done – and it can be done. Please leave a comment and let me know what you think so far!
All the best,