Governments can offer incentives and invest in important research, but politicians like to remind us that we won’t see real movement in the clean technology industry unless the private sector joins in on the action. Sometimes, though, a government incentive program is exactly what energy companies need to make that jump.
This dynamic between public and private is playing out right now in Japan, where the government announced a new incentive program for renewable energy providers in July. The program requires utilities to pay above-market rates for renewable energy (and pass along the extra cost to consumers as a surcharge). Now, as a result of the new money to be made in renewables, private companies are investing.
The latest announcement comes from West Holdings Corp., a Japanese home renovator. The company will spend $1.27 billion through its newly formed Japan Mega Solar Power Co., a subsidiary that will be developing 250 solar power plants. The plants, expected to generate 500 megawatts of energy, will be set up over the next five years.
Japan Mega Solar Power Co. has already attracted 12 outside investors, including a manufacturer of photovoltaic cells and a finance and leasing company, providing further evidence that many businesses and industry insiders see renewable energy as having real potential for high economic growth.
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