Solar Plexus: When, Japan Wonders, Should Clean-Energy Subsidies End?

Renewable energy often seems a little bit like the old joke about Brazil: The technology of the future, and it always will be. Proponents say they want subsidies only until clean-energy is competitive—but that day always gets pushed back further, even with expensive oil.

Japan’s the latest country tying itself in knots trying to figure out how to promote clean energy and not break the bank in the process. The country’s government is squabbling internally over whether to bring back subsidies for solar power, two years after getting rid of them, Reuters reports, because the solar-power industry has gone south without them. One ministry says yes; another says no.
This is the same kind of debate taking place right now in other countries, like the U.S. and Germany. In the U.S., the Senate has tried and failed six times to extend tax credits for renewable energy like wind and solar power; the drive keeps getting derailed by wider fights over the budget. But even without fresh government support, some clean energy—like wind power—is still going gangbusters. Not enough, though, counter many clean-energy advocates. They say long-term government support is crucial if America hopes to jumpstart an alternative-energy sector that can help take the sting out of high oil prices and help fight global warming.

Cloudy Germany used generous government support to create a solar superpower—but on the backs of electricity ratepayers. Now, the government has scaled back subsidies, torn between propping up thousands of “green collar” jobs in vibrant industries and potentially angry voters stuck with pricey power bills.

Japan used subsidies to help create a thriving solar power industry (even though it never managed the same for wind power). But the goal was always to wean the industry off subsidies as it became more competitive with traditional fuels; two years ago, the government did just that. Since then, Japan’s solar-power sector has been overtaken by rivals in Germany and China, and consumers stopped slapping solar panels on their roofs.

That’s forced an official rethink in Tokyo.

Wall Street Jounal blogs