In Japan, funding of renewable energy has started very early. Various opportunities for funding exist, the latest one dating back to the first law enacted after the oil price crises in the 1970s. The Japanese government enacted the "Law Concerning Promotion of Development and Introduction of Oil Alternative Energy" in 1980 and implemented measures for development and introduction of alternatives to oil, including renewable energy.
Promotion for the local introduction of New Energy
One funding opportunity is provided by the law “Promotion for the local introduction of New Energy” which was introduced in 1998. Renewable energy projects are subsidized at the local level by the government authority NEDO to promote new energy sources. Public entities and NGOs are eligible for such subsidies which also aim at the promotion of solar thermal systems. The subsidy rate is up to 50% of the cost for installation, deployment, promotion of public awareness and related activities. In 2006 5.2 billion yen are available for funding.
New Energy Facility Introduction Project and New Energy Introduction Promotion/Dissemination Project
Both projects are implemented by local governments which in return receive subsidies by NEDO. The "Facility Introduction Project" subsidizes local governments for up to 50% of the facility introduction costs and up to 20 Mio yen for dissemination. Activities of private entities are also supported if they introduce methods for effective new energy utilization at the grassroots level. Projects can be subsidized at up to 50 % of the cost to disseminate private entities' active efforts across the country in order to accelerate the promotion of new energy. Projects to promote introduction can be funded up to 50%, activities to promote dissemination can receive a specified amount of up to a maximum of 20 million yen. In order to be eligible for funding the effective heat collection area of the solar system has to be 100 m² or greater. For non-profit private entities there are no efficiency requirements.
Project for promotion of non-profit activities on New Energy and Energy Conservation
The project was implemented in 2000 with the goal of achieving the accelerated promotion of new energy and energy conservation. The budget of the project is 170 million yen. NEDO is trying to foster and enhance the introduction and promotion of new energy and energy conservation measures. This includes subsidizing the private-sector, non-profit groups and other organizations that independently adopt new energy facilities or implement projects to further promote dissemination. The maximum subsidy within this project is a refund of 50% of the project costs.
Project for Supporting New Energy Operators (Debt Assurances)
The project was established in 1997 and had a budget of 34.5 billion yen in 2005. The project subsidizes business operators undertaking an utilization program certified under Article 8 of the “Law Concerning Special Measures for Promotion of New Energy Use” to offset the project costs. Bank loans and other liabilities are also guaranteed. Subsidized programs are placed under the government's direct control, assigning NEDO as the guarantor of the project's liabilities. 90% of these liabilities are guaranteed. The debt assurance range is up to 15 times the fund with a guarantee fee of 0.2%
Law Concerning Special Measures for Promotion of New Energy Use (New Energy Law)
The" New Energy Law" was enacted in April 1997 to accelerate the advancement of the introduction of New Energy, aiming to achieve its targets by 2010. The law provides financial support measures for utilities that use New Energy. There is, for example, the "Regional New Energy Implementation Promotion Measures" which covers up to 50% of the business expenses. The money is used to assist local authority to conduct advanced approaches of large scale and concentrated implementation of new energy such as solar thermal utilization in regional areas. Under the "Regional Energy Development and Utilization Promotion Measures" an interest subsidy for low interest loans from financial institutions is provided. The lending capital has to be relevant to regional energy development and utilization business. Under the "New Energy Regional Activity Support Business" the implementation of new energy is supported at a regional level. This includes providing 50% of the business expense of the supplementary business that is executed for the third party which introduces the new energy facility. "Advanced solar thermal utilization system implementation promotion measures for houses" is promoting the utilization of solar equipment by offering cost decrease and assistance with a fixed amount.