Client Alert
Japan Ramps Up Renewable Energy Generation
July 31, 2012
BY JOSEPH KIM, HAJIME KANAGAWA & GUSTAV RUNELAND
A new feed-in tariff regime (the FIT Regime) for renewable energy power plants (solar, wind, hydro, geothermal and biomass) came into effect in Japan on July 1, 2012 under the Act on Special Measures Concerning the Procurement of Renewable Electric Energy by Operators of Electric Utilities (the Act). The Act is attracting significant interest from energy market participants both in Japan and from abroad and may facilitate greater use in Japan of non-recourse or limited recourse financing structures in the renewable energy sector. The FIT Regime is widely expected to offer the most favorable terms to first-movers and may be less favorable for new projects in ensuing years, depending on how future procurement pricing is adjusted in accordance with the Act.