Japan Ruling Party Proposes Cutting Subsidies for Solar Projects

(Bloomberg) -- Japan’s ruling party has proposed cutting government subsidies for large-scale solar projects, as it pushes to reduce emphasis on renewables in the nation’s energy strategy.

The proposal comes as Prime Minister Sanae Takaichi — who is also head of the Liberal Democratic Party — prioritizes energy security and self-sufficiency, especially as a significant chunk of Japan’s solar imports come from China, with whom relations are currently strained. Takaichi has stated in the past her opposition to any policy that “covers our beautiful land with foreign-made solar panels.” 

Projects with capacity over 1 megawatt should no longer be eligible for subsidies in the form of feed-in tariffs, the LDP said in a statement late on Thursday, arguing that declining costs have made them economically viable for developers. 

The proposed move also aligns with the government’s efforts to revive atomic energy as a central pillar of its energy strategy. Japan is poised to restart several nuclear power facilities, including the world’s largest, the Kashiwazaki Kariwa Nuclear Power Plant.

Japan, the most fossil-fuel reliant among the Group of Seven advanced economies, has faced criticism from environmental groups for not doing enough to fight climate change. Its utilities have long justified their continued use of dirty fuels by saying large-scale solar and wind deployment is limited by the island-nation’s geography. 

Still, the country aims to more than triple the share of solar in its energy mix to 23-29% and quadruple nuclear power to 20% by fiscal year 2040. Takaichi and the LDP have expressed support for perovskite panels, which are next-generation solar products that proponents say are more energy-efficient and flexible. 

The proposed rule-tightening for solar projects also follows warnings from the environment ministry and public opinion that solar farms that require a large amount of land could threaten the habitats of rare species. Earlier this year, Kushiro city in the northern Hokkaido prefecture issued a declaration against large-scale solar plants in order to “protect nature.”

The measure is part of a draft energy bill the LDP intends to table in parliament in fiscal year 2026. It’s likely to pass on support from the party’s coalition partners.  

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