Japan Taxes and incentives for renewable energy KPMG Global Energy & Natural Resources.


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Feed-in tariff

Feed-in tariffs for renewable energy became available in Japan in July 2012. The feed-in tariff rate for solar energy is Japanese yen (JPY)31.32/kW for the period from 1 April 2015 to 30 June 2015 and JPY29.16/kW for the period from 1 July 2015 to 31 March 2016, respectively. The feed-in tariff rate for wind power energy is JPY23.76/kw from the period from 1 April 2015 to 31 March 2016. The operation period is 20 years. The feed-in tariff rate is revised annually.

In order to obtain the feed-in tariff, the applicant is required to meet the following conditions:

  1. The power plant development plan is approved by the government.
  2. The development plan applied for interconnection to transmission line with the electric power company.
  3. The applicant is required to submit copies of land register and purchase agreement/order for equipment to the Ministry of Economy, Trade and Industry (METI) within 180 days from the next day of approval.

The METI rescinds its approval if the required documents are not submitted within the deadline or the submitted documents are not sufficient to substantiate land and equipment for solar energy.

Green Investment Tax Incentive

Green Investment Tax incentive is available for the taxpayer who obtained approval for the feed-in tariff and acquires solar or wind power generation equipment and places in business within 1 year from the acquisition. The taxpayer can choose one incentive from the following, assuming the equipment is placed in business by 31 March 2016:

  1. 30 percent special depreciation in addition to ordinary depreciation
  2. 100 percent depreciation (that is, total acquisition costs expensed upfront) for wind power generation equipment
  3. Tax credit (7 percent of acquisition costs, only available for small and medium sized enterprises (SMEs). An SME is a company with its paid-in capital of JPY100 million or less and is not 50 percent or more owned by a large corporation with its paid-in capital of JPY100 million.

Taxes and Incentives for renewable energy

A 2015 KPMG report that provides updates on renewable energy promotion policies for over 31 countries.

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