Japan lifts offshore wind tariff, cuts solar prices

TOKYO, March 25 (Reuters) - Japan will lift the amount utilities must pay for electricity from offshore wind farms while cutting prices for power fed in from solar projects, as the country looks to diversify its use of renewable energy. The decision by Ministry of Economy, Trade and Industry (METI) follows a recommendation made by a government panel earlier this month and aims at boosting business for companies connected to the wind sector both at home and abroad such as Hitachi Ltd and Mitsubishi Heavy Industries.

Japan, hoping to boost alternative energy in the wake of the Fukushima nuclear disaster, introduced a feed-in tariff scheme in 2012, under which utilities must buy all power generated from renewable sources such as wind, solar or geothermal. But wind projects accounted for only 3 percent of development approvals under the programme as of November, with solar making up 94 percent. In hopes of increasing wind power investments, the trade minister created new categories for offshore and onshore, and set a higher price for offshore wind power. At the same time, Japan decided to slash prices for power fed in from solar projects for a second straight year to reflect declining prices of solar facilities, a ministry official said. Below is a table of the prices set by Japan's METI for the fiscal year that begins from April and the actual prices for the current fiscal year that ends in March. The prices are in yen per kilowatt-hour (kwh) and exclude tax.

Power producer type Fiscal 2014 Fiscal 2013 Solar power (10 kwh or more) 32 36 Solar power (10 kwh or less) 37 38 Offshore wind power (20 kwh or more) 36 22 Onshore wind power (20 kwh or more) 22 22 wind power (20 kwh or less) 55 55 Small-and-Medium scale hydro power* 14-34 24-34 Biomass power** 13-39 13-39 Geothermal power** 26-40 26-40 *Depend on size and use of existing waterways. **Depend on project size.

(Reporting by Yuka Obayashi and James Topham; Editing by Jeremy Laurence)