Municipalities Seek More Control Over Renewable Energy Projects

August 1, 2023|Renewables Tax

Last year, a small town in western Japan shocked the renewables industry when it called for a new tax on solar projects calculated on the area that panels occupy. The idea was eventually quashed by the central government. But this year, a new and much larger regional actor has announced similar plans.

Miyagi Prefecture in northeast Japan has an area of 7,300 square kilometers, close to the size of Cyprus. It was an early mover in the renewables space, attracting the fourth largest Feed-in-Tariff capacities in 2014. Yet, a decade later, it has unveiled plans to install a new levy that would effectively tax every one in five yen earned by some solar and wind operators.

The stance by local governments seems at odds with the national goals to double Japan’s renewables capacity this decade to meet CO2 reduction targets. However, the tax plans by the regions reflect their growing concern that a general rush to add more renewables has ignored certain negative impacts on the local environment and society. The most acute today is concern that the clearing of trees for some renewables projects will expose the affected areas to risks of landslides and water shortages.

Miyagi’s tax has yet to receive approval at the national level. But its passage could alter the economics of future projects and entice other regions to add levies on a renewables sector that is already contending with rising costs and lower tariffs. When Japan NRG spoke with local officials, they explained that their motivations are misunderstood.

The full deep-dive analysis texts are available in the Japan NRG Weekly report. You need to be a member to access the reports. Please see the Subscription page for details or email

Already a member? Please use your login details to access the Japan NRG Archive.