The Japan government is planning to cut the quantum of premium tariffs for solar projects in the country by as much as 16% because the cost of producing power from the sun is lower than before.
An agency which considers the tariffs on a regular basis indicated that the current tariff of 32 yen (US 26 cents) per kilowatt-hour may be reduced to 29 yen for the period from April to June this year, and to 27 yen after that. The cost of developing solar projects has dropped considerably globally as prices of raw materials to produce equipment including panels, has declined markedly since 2011.
Japan had introduced premium tariffs for solar projects in 2012, which has led to an unprecedented boom in new projects being developed. The tariffs are for a period for up to 20 years.