The economy ministry is moving to revamp the “feed-in tariff” (FIT) system to promote renewable energy sources due to fears that households and companies will be forced to shoulder rising costs, sources said.

Under the system introduced in July 2012, electric power companies must purchase solar and other alternative energy sources at government-designated prices.

The Ministry of Economy, Trade and Industry will consider revoking certification given to solar power generation facilities that received it soon after the FIT system started but have yet to begin operations.

It will also consider lowering the prices at which the electric power companies purchase electricity produced by solar power.

One reason for this is that prices were initially set at high levels.

The purchase price for electricity produced by solar power generation facilities with a generating capacity of 10 kilowatts or more was initially set at 40 yen ($0.35) per kilowatt hour.

The price was gradually lowered to 36 yen in fiscal 2013 and 32 yen in fiscal 2014. In fiscal 2018, the price dropped to 18 yen.

Of the solar power generation facilities that received certification in the first three years, nearly 60 percent have already started operations.

However, the remaining 40 percent, with a combined generating capacity of 23.52 gigawatts as of the end of fiscal 2017, have yet to begin operations. Many of them are apparently waiting for prices of solar panels to drop further so they can maximize their profits.

According to calculations by The Asahi Shimbun based on the data released by the ministry, if all of those facilities begin operations, electric power companies will be forced to shoulder an additional 1.2 trillion yen a year to purchase electricity produced by solar power.

That would then be passed on to households and companies in the form of higher electricity charges.

It was estimated that the increase would come to about 900 billion yen in total, or 220 yen a month for a typical household.

A standard family currently pays 754 yen per month in such costs.

As of fiscal 2030, the ministry envisages curbing the total costs borne by electric power companies to purchase renewable energy sources in the range of 3.7 trillion yen and 4 trillion yen.

This would include not only solar power, but also wind power, mid- and small-scale hydro power, geothermal power and biomass.

Total costs already reached 2.7 trillion yen in fiscal 2017.

Solar power has spread more widely and rapidly in Japan than other renewable energy sources.

If the now-idle certified solar power generation facilities begin operations in the future, the electric power companies’ total costs could reach 4 trillion yen.

If that happens, electric power companies will not be able to purchase electricity produced by renewable energy sources other than solar power, which would effectively block the spread of those energies.

Consumers will be forced to shoulder higher electricity bills though solar power generation costs are falling sharply mainly due to the spread of cheap solar panels.

In light of this, the ministry decided to start reviewing the FIT system in a scheduled meeting this month of a special council of experts.

(This article was written by Rintaro Sakurai and Shinichi Sekine.)