Publication date: April 6, 2025. Renewable Energy Levy Increases to JPY 3.98 per kWh
Renewable Energy Levy Increases to JPY 3.98 per kWh
The Ministry of Economy, Trade and Industry (METI) announced that the renewable energy levy for FY2025, imposed on electricity prices under the Feed-in-Tariff (FIT) and Feed-in-Premium (FIP) schemes, will increase by JPY 0.4 trillion compared to the previous year, reaching a record high of JPY 3.1 trillion. The levy unit price will also rise, increasing by JPY 0.49 per kWh from the previous year to JPY 3.98. \
Cost Breakdown, Impact on Households, and Historical Context
The estimated total cost of purchasing renewable energy is JPY 4.854 trillion. After deducting the expected revenue from selling renewable electricity in the wholesale power market, which is projected to be JPY 1.7906 trillion, the total renewable energy levy amounts to JPY 3.0634 trillion. The projected wholesale power market price (based on the average of past results) is JPY 12.2 per kWh, which is JPY 1 lower than JPY 13.2 per kWh in FY2024, leading to a decrease in sales revenue.
By adding a JPY1 billion administrative fee for the Organization for Cross Regional Coordination of Transmission Operators (OCCTO) to the total levy and dividing it by the estimated electricity sales volume of 770.8 billion kWh, the levy unit price is set at JPY 3.98 per kWh. For a typical household consuming 400 kWh per month, the monthly burden will increase by JPY 196 from the previous year to JPY 1,592, and the annual burden will rise by JPY 2,352 to JPY 19,104. The new levy rate will be applied to electricity bills starting in May 2025.
When the FIT system began in FY 2012, the purchase price for commercial solar power generation was JPY 40 per kWh, significantly higher than the current rate. The Agency for Natural Resources and Energy (ANRE) expects that purchasing costs will begin to decline after the end of the 20-year purchase period in FY2032.
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