Japan plans to allocate JPY 210 billion (USD 1.34 billion) to support companies using clean electricity, as part of a push to accelerate renewable energy deployment, stimulate private investment and drive regional economic growth, a government official said late on Monday.
The subsidy programme is intended to support Japan — the world’s fifth-largest carbon dioxide emitter — in meeting its clean energy targets while reducing reliance on imported fossil fuels, following setbacks in offshore wind and large-scale solar development.
The scheme will run for five years starting in fiscal 2026, according to Juntaro Shimizu, director of the Green Transformation (GX) policy group at Ministry of Economy, Trade and Industry.
Under the programme, companies that operate exclusively on decarbonised electricity and contribute to the regional economies where that power is generated will be eligible for subsidies covering up to 50% of their capital expenditure. Data centre operators meeting the same criteria will also qualify, Shimizu said.
The government plans to begin accepting applications from eligible businesses in the next fiscal year.
Japan aims for renewable energy to account for up to 50% of its electricity mix by fiscal 2040, with nuclear power supplying a further 20%. In fiscal 2023, renewables made up 22.9% of electricity generation, while nuclear accounted for 8.5%.
Progress towards the renewables target has slowed in recent years, with offshore wind projects — considered central to Japan’s energy transition — facing rising costs, and large-scale solar developments encountering delays due to local opposition.
The new subsidies form part of Japan’s GX 2040 Vision, a national framework approved by the Cabinet earlier this year that seeks to align decarbonisation with industrial policy and economic growth.
As part of the initiative, the government will introduce a “GX Strategy Region” system aimed at creating new industrial clusters in areas with access to decarbonised power. Local governments and companies will jointly develop proposals, with the national government selecting regions and providing support through subsidies and regulatory reforms. Applications from local authorities are expected to open later this fiscal year.
