Feed-in Tariff Pricing and Social Burden in Japan: Evaluating International Learning through a Policy Transfer Approach

Abstract

Feed-in tariff (FiT) policy approaches for renewable energy (RE) deployment are employed in many nations around the world. Although FiTs are considered effective in boosting RE deployment, the issue of increasing energy bills and social burden is an often-reported negative impact of their use. The FiT has been employed in Japan since 2012, following after many developed countries, and, as was experienced in other nations, led to a social burden imparted on society significantly higher than initial government estimates. Although policy decision making does not necessarily reflect international policy experience, it is still prudent to ask how international policy experiences of social burden increase were considered within the Japanese approach. In this research, we analyzed the transfer process by adapting a conventional model to develop more objective observations than was previously possible, by setting a benchmark for evaluation based on prior international experiences. We identified two streams of policy transfer, each led by different actors; the government and representatives of the National Diet of Japan (Diet). Both actors were exposed to the same experiences, however the interpretation, application to policy development and priority settings employed were vastly different. Although the framework can only assess policy learning processes, we have found that the government undertook a reasonable and rational process toward learning, while, on the other hand, the modified bill developed by the Diet members did not thoroughly derive learnings in the same way, due to cognitive and political reasons, and specifically, the issue of limiting social burden was not addressed.

Multiple Streams and Power Sector Policy Change: Evidence from the Feed‐in Tariff Policy Process in Japan

“…The costs associated with these purchases are distributed among all electricity consumers. As a previous study on the Japanese FiT argues, the original FiT program was designed to improve the economic efficiency of RE uptake, but it was amended without further government consideration, resulting in the lack of a feedback‐based tariff adjustment mechanism and an unmanageable level of costs imposed on consumers (Tanaka et al 2017). This amendment is in stark contrast to previous policy approaches where the RE uptake had been limited under various constraints including economic efficiency of electricity generation and existing grid infrastructure.…”

“…In this regard, a Ministry executive stated that, at the time, Diet members were unwilling to entertain discussions concerning social burden levels, or even concerning the electrical grid (Yoshino 2016). Therefore, the expertise accumulated in the bureaucracy, including the technical constraints of the electricity grid, anticipated to be vulnerable to intermittent generation from RE sources, and the impact on future social burden, were not reflected in the final bill (Tanaka et al 2017). Policy formulation without expert feedback helped the revised bill to survive, and also protected the bill from exposure to public criticism.…”

The Profitability of Residential Photovoltaic Systems. A New Scheme of Subsidies Based on the Price of CO2 in a Developed PV Market

“…At the same time, the guaranteed security of tariffs, defined in a FIT scheme, has driven several investors to choose this resource (Avril et The Feed-in-Tariff (FIT) scheme has encouraged investors to be involved in RE production worldwide. Large energy providers offer long-term contracts to smaller-scale RE producers to sell their green energy to the market under a fixed tariff above the market rate (Pyrgou et al 2016;Tanaka et al 2017). The policy subsidy has determined the development of PV source with the aim to tackle the climate change.…”

Policy and market drivers for advancing clean energy

“…Table 1 lists the top clean energy producing countries as of 2018. A historical policy review of these countries shows significant reliance on feed-in tariffs to stimulate early deployment of renewable energy, particularly in China [3]- [6], Europe [7]- [14], Japan [15], and India [16]- [19]. A feed-in tariff is a government-determined cost-of-service-based price for a producer typically paid by wholesale energy buyers.…”