Greater investment on solar power systems is anticipated to be a main feature of Japan’s new stimulus plan, its fourth such package in 2008. The plan is estimated to comprise fiscal investment of around $150 billion.
Japan should raise its solar power capacity 20-fold by 2020 from 2005 levels, double its previous target.
Japan’s current subsidy works out to about JPY245,000 for 3.5 kilowatt of equipment per household, or around 10% of the cost.
But analysts say homeowners are cautious about big spending amid a deteriorating economy will not be easily won over, especially as solar power is anticipated to become cheaper and more efficient in coming years.
People say they would rather wait until the cost halves in 3 to 5 years, which is what the government has forecast, said Etsuko Akiba, head of media relations at the Nippon Association of Consumer Specialists.
The government budgeted JPY9 billion for its subsidies over the three-month period and has also announced an additional JPY20 billion for the financial year that began April 1, 2009 planning for 120,000 applications over the 15 months.
Many domestic governments are also providing subsidies for solar power to supplement moves by the central government.
Solar power is the most costly among clean energy sources in Japan, and fiscal support is seen as essential to expand demand and encourage solar panel makers, such as Sharp Corp, to invest in research and expansion abroad.
Demand for solar panels dropped after the government pulled the plug on subsidies in March 2006.
