UPDATE 1-Japan panel to set solar power fee at 51 cents/kwh -Nikkei

Sun Apr 22, 2012 11:09pm EDT

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* Recommendation seen in line with solar power industry requests

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TOKYO, April 23 (Reuters) - A Japanese government panel is likely to recommend utilities pay 42 yen (51 cents) per kilowatt-hour (kwh) for solar power supplies in a feed-in tariff scheme, in line with requests by the solar power industry, the Nikkei business daily said.

Japan is overhauling its energy policy after the Fukushima nuclear crisis shattered public confidence in the safety of atomic power, and is set to introduce a new subsidy scheme from July which covers all kinds of renewable energy to support the budding market for domestically produced power.

The recommended rate for solar power includes tax and is to be paid for about 20 years, the report said on Monday. That is roughly double the rate that households pay for electricity usage and almost meets the solar power industry's request for 42 yen without tax, it added.

The rates could encourage potential business investors to enter the market, but the higher rate would come at a greater cost to consumers, to whom the utilities pass on the burden.

Solar power in Japan accounts for less than 1 percent of total power due to lack of sufficient subsidies in the past.

A group of experts appointed upon approval by parliament will recommend a price and a period for each type of renewable energy, including wind, biomass and geothermal, as early as this month. Japan's Trade Minister Yukio Edano will decide the final price taking into account the panel's recommendation. ($1 = 81.6050 Japanese yen) (Reporting by Osamu Tsukimori; Editing by Himani Sarkar)

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