Japan Mulling Auction Process for Large Solar Project Approvals

(Bloomberg) — Japan is considering an auction process to
allow solar power competitors to outbid each other for approvals
to build large projects in an effort to drive down costs.

Japan’s Ministry of Economy, Trade and Industry is seeking
to overhaul its current incentive program that is based on a so-called feed-in tariff, or guaranteed payouts, offered to
renewable energy producers. That solar tariff is set annually by
the government to reflect equipment and operational costs and
has dropped every year since it started in July 2012.

“The program led to a rapid expansion of commercial solar
and there has been a need for balance between different
renewable sources,” according to a draft proposal from a panel
set up by METI.

According to the new proposal, solar power producers that
can operate at the lowest cost will be selected to develop
projects. The panel also proposed that the ministry should only
give approval to clean-energy developers who secure grid
connections to reduce the number of projects that haven’t
started after for lack of connectivity.

To contact the reporter on this story:
Chisaki Watanabe in Tokyo at cwatanabe5@bloomberg.net

To contact the editors responsible for this story:
Reed Landberg at landberg@bloomberg.net;
Ramsey Al-Rikabi at ralrikabi@bloomberg.net
Abhay Singh, Aaron Clark

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