Japan May Pull Support From a Quarter of Clean-Energy Projects

(Bloomberg) -- About a quarter of all approved clean-energy projects in Japan may no longer qualify for government incentives after failing to meet a deadline to secure grid access, according to preliminary estimates from the Ministry of Economy, Trade and Industry.

Some 456,000 projects totaling 27.7 gigawatts failed to get connections to the grid from local utilities by a government-imposed deadline, the ministry said in the report, adding that the final number could be smaller.

Japan introduced the deadline to weed out stalled clean-energy projects that had won preferential power prices but were never built.

As of the end of June 2016, the ministry had approved about 3.15 million projects, representing a combined capacity of 106.5 gigawatts, to receive the preferential rates, according to the ministry data released Friday. The clean-energy developments that no longer qualify for the rates are among this group, which also includes projects that were built and running before the incentive program’s introduction.

The projects at risk represent about 26 percent of the approved projects by capacity and 14 percent by volume.

The preferred rates were introduced in July 2012 to boost the development of clean energy such as solar and wind in the wake of the Fukushima nuclear disaster. The favorable tariffs fueled a boom in the solar market, though some projects languished.

Solar capacity in Japan has surged almost sixfold in the four years since the end of 2012, according to Bloomberg New Energy Finance data.