Higher electric bills on horizon to pay for solar

January 27th, 2012 by Philip Brasor & Masako Tsubuku

The government’s plan to develop solar energy as an integral part of Japan’s electric power system is starting with power companies buying surplus energy from people who have installed solar collection systems in their homes. To promote solar energy, the companies are required to pay a certain price for the power, and they pass this added cost on to all their customers as a surcharge. On your bill it is designated as taiyoko sokushin fukakin (solar energy promotion supplement) and varies in amount depending on where you live. In regions where solar energy collectors are more prevalent, the surcharge will be larger, since the utilities in those areas pay more money for solar energy. As can be expected, sunnier regions tend to have more solar collectors.

Pittance: the surcharge for solar energy promotion on this December bill from Tepco is ¥6

Right now 3.3 percent of homes in Japan have solar systems, which means Japan has a long way to go before it reaches former Prime Minister Naoto Kan’s target of 10 million homes with solar systems, which would mean about 40 percent. In Kyushu, which tends to have more days of sunshine than other regions, the portion is 6.4 percent. In Hokkaido, it’s only 0.8 percent, which means the average surcharge for Kyushu residents is much higher than it is for Hokkaido residents.

Another factor that determines how widespread solar systems are in a given area is the amount of subsidies local governments offer to residents who install them. In 2010, Aichi Prefecture was No. 1, with 16,000 applications for subsidies, followed by Saitama and Tokyo. Home ownership rates in Aichi and Saitama are very high.

The Nihon Keizai Shimbun has reported that on Jan. 24 Japan’s 10 regional power companies announced that the surcharge would increase in 2012. Currently, the surcharge ranges from ¥2 to ¥21 per month. It will increase, depending on the place, by ¥3 to ¥24 per month. (For Tokyoites, it will average about ¥17 a month.) These 10 companies bought 2.15 billion kilowatt/hours worth of energy from home solar systems in 2011, which is equivalent to 30-40 percent of the output of a nuclear reactor during the course of a single year. For this, they paid ¥95.6 billion, a 53 percent increase over what they paid for solar energy in 2010.

In July, the power companies will start another phase of the energy scheme when they begin buying electricity from wind power generators and other renewable energy sources, though it isn’t clear right now what sort of surcharge will be added to energy bills as a result.

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3 Responses

  1. Dear Philip and Masako,

    Thanks for this article but I wonder if I can have you confirm one thing. The rates that the power companies must pay for surplus energy is obviously greater than the value of the surplus energy itself, hence the need for taiyoko sokushin fukakin to offset the loss for the power company. Do you have any idea what the rate power companies will pay for surplus energy will be? Or how much the average solar panel owner of a single family house might save on their energy costs in a month/year?

    Do you know if I have solar panels installed on my house if it would cover all my energy needs? I assume not because it seems if it did, a lot more people would do it. Following that thought, if the energy from my solar panels does not cover all my energy needs, how would I have any surplus for sale at the end of the month? To go even one step further, if the rate I get paid for my surplus energy is greater than the rate I would pay the power company normally for energy, why don’t I just sell all my energy generated from my solar panels back to the power company as surplus energy?

    Hope that all makes sense. I appreciate any consideration you can give to my questions and I love your sites. I just bought a house in Makuhari and I read and continue to read your articles with great interest.

    Thank you so much,


  2. At present, regional power companies pay ¥48 per kWh for surplus solar electricity of less than 10 kilowatts and ¥24 per kWh for more than 10 kilowatts.

    Solar panels only generate electricity when the sun is out, so surplus power is only fed into the grid during daylight hours, meaning that the panels are producing more electricity than you need at the moment. It is not cumulative. That could change with the implementation of a smart grid system, but that’s still a ways down the road.

  3. We have solar panels in Tokyo & it is working out great. We use LEDs everywhere & set the timers on the washing machine, etc, so they all run overnight. We sell most of the power that we generate in the day & then buy it back for less at night time. At the current rate of return the panels will have paid for themselves in 5 years, then everything else will be gravy. The house is all-denka, and they pay us money pretty much every month. Forget the CO2, it just makes economic sense if you own a place where you can do it.


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