On Sunday, December 14, 2025, Yahoo! News reported an article titled, “New Mega-Solar Projects: End of Electricity Price Premiums… Funded by Renewable Energy Surcharge Paid by Consumers.” This article explains what the electricity price premium system is, how the renewable energy surcharge works, and how the abolition of the premium may affect consumers, Japanese stocks, and global markets.
New Mega-Solar Projects: End of Electricity Price Premiums… Funded by Renewable Energy Surcharge (Yomiuri Online) – Yahoo! News
The Japanese government and the ruling Liberal Democratic Party have decided to end support for new large-scale solar power projects, known as “mega-solar,” starting in fiscal year 2027. Environmental damage caused by mega-solar projects has become a social issue, prompting a fundamental shift in policy that had promoted renewable energy expansion since the 2011 Great East Japan Earthquake.
What is the Electricity Price Premium System?
The electricity price premium system was officially introduced in 2012, following the 2011 Great East Japan Earthquake and the Fukushima Daiichi nuclear accident. The goal was to reduce dependence on nuclear power and accelerate the adoption of renewable energy, led by government initiatives.
Under this system, electricity generated from renewable sources can be purchased by utility companies at prices higher than the market rate. This ensures that renewable energy providers have a stable investment environment, encouraging faster deployment of renewable energy.
The system covers not only solar power but also wind, hydro, and geothermal energy.
What is the Renewable Energy Surcharge Paid by Consumers?
The cost of purchasing electricity from renewable sources at above-market prices is not covered by taxes, but by consumers through a “renewable energy surcharge.” This surcharge is added to monthly electricity bills, and households and businesses across Japan contribute to it. According to the article, of the total 4.9 trillion yen purchase cost in fiscal 2025, 3.1 trillion yen comes from this surcharge.
Electricity Bill Structure (Including Renewable Energy Surcharge)
- Basic Charge
- Energy Usage Charge (based on kWh consumed)
- Fuel Cost Adjustment (reflecting changes in fuel prices)
- Renewable Energy Surcharge (to support renewable energy)
The more electricity you use, the higher the surcharge. It is uniform nationwide, regardless of electricity provider or contract plan, and usually appears as a separate line item on monthly bills.
Which Projects Will Lose Support?
According to the article, the abolition of the price premium under the FIP system will affect:
- Mega-solar projects with output of 1,000 kW or more
- Large-scale solar power plants, often built on forests or vacant land.
- Environmental damage and local disputes have been reported.
- Ground-mounted commercial solar projects with output of 10 kW or more
- Smaller than mega-solar but still commercially operated on land.
- The key point is that all ground-mounted commercial solar, regardless of size, is affected.
Projects that will continue to receive support
- Commercial rooftop solar installations
- Household solar panels
In short, the policy change is limited to new ground-mounted commercial projects.
AI Forecast: Impact on Consumers (Renewable Energy Surcharge)
Based on the article and the system structure, it is unlikely that the surcharge will immediately decrease significantly. The reasons are:
- The abolition applies only to new projects starting in fiscal 2027 or later.
- Existing operational facilities will continue to receive the purchase premium for the duration of their contracts.
However, stopping support for new large-scale solar projects may help limit future increases in the surcharge. Therefore, this policy shift should be seen as preventing further growth in the surcharge, rather than reducing it immediately.
AI Forecast: Impact on Stock Prices
The policy change may affect the stock prices of certain companies, based on recent news and market reactions. This is not a stock recommendation, but an observation of potential market impacts.
Japanese Stocks
- Renova (9519) – A major independent renewable energy company (solar, wind, biomass). Reduced mega-solar support could impact revenue expectations.
- West Holdings (1407.T) – Solar panel manufacturer; large solar projects are a key part of business.
International Stocks
Solar panels and related technologies are traded globally. Reduced demand from Japan’s mega-solar projects may affect foreign panel manufacturers and technology companies.
- NextEra Energy (NEE) – One of the world’s largest renewable energy companies. Sensitive to global policy trends.
- Enphase Energy (ENPH) – Microinverter manufacturer; stock may fluctuate with policy uncertainty.
- First Solar (FSLR) – US solar module manufacturer; tax incentives and policy changes influence stock performance.
Conclusion: The Contradiction Between Environmental Goals and Renewable Energy
Promoting renewable energy is important for the global environment, but large ground-mounted solar projects have caused environmental problems such as deforestation and landscape degradation. There is a contradiction in harming the environment to achieve eco-friendly energy goals.
This policy revision is a small but important step toward resolving this contradiction. Moving forward, it is hoped that renewable energy will continue to expand while better protecting the natural environment.
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