Japan Mega Solar Co., a company created by Japanese home renovator West Holdings Corp. (PINK: WSTHF), will invest around $1.3 billion in developing solar plants designed to take advantage of the country’s feed-in tariffs for renewable energy development.
The project calls for 250 plants with a combined capacity of around 500 megawatts. Japan Mega has already found interest from 12 investors, including Orix Corp. (NYSE: IX), JA Solar Holdings (NASDAQ: JASO), and LS Industrial Systems Co. (KRX: 010120) of South Korea, Bloomberg reports.
Under Japan’s new incentive program, utilities pay above-market rates to the developers of clean energy; this cost difference is passed on to the consumer in the form of surcharges. The feed-in tariff is set at a highly attractive rate of 42 yen per kilowatt-hour for 20 years, which is almost 3 times what industrial users pay for conventional electricity (as of the year ended this March).
From Bloomberg:
“We will give priority to JA Solar and LS Industrial Systems” for solar panels to be used in the plants, [West Holdings Corp. Senior Managing Director Toshihisa] Nagashima said. The company may review the project depending on preferential rates set annually by the government for clean energy, he said.
