Up to 100 Japanese solar companies are on the verge of bankruptcy this year due to reductions in subsidies, according to Tuesday report by the corporate credit research company Teikoku Databank.
The report concludes that roughly 50 Japanese solar companies already went out of business during the first six months of 2017. This is more than double the number of companies that went under during the same period in 2016.
The number is a significant increase in solar bankruptcies, as only 251 companies have gone under since January 2006.
Many of the bankruptcies are due to cuts in a major solar subsidy. Japan launched a feed-in tariff to financially benefit solar power in 2012, but has progressively cut spending on it. The government has announced that it intends to entirely remove the feed-in tariff in the early 2020s.
Solar power companies in the U.S. are heavily supported by financial invectives from the government. Most subsidies go to residential installations payments, called net metering, or a 30 percent federal tax credit. Previously, solar subsidies were so lucrative that solar-leasing companies installed rooftop systems, which run at minimum $10,000, at no upfront cost to the consumer. This naturally favors relatively wealthy consumers.
Solar power and wind power get 326 and 69 times more in subsidies than coal, oil, and natural gas, according to 2013 Department of Energy data collected by Forbes. Green energy in the U.S. received $13 billion in subsidies during 2013, compared to $3.4 billion in subsidies for conventional sources of energy and $1.7 billion in subsidies for nuclear, according to data from the Energy Information Administration.
Researchers found that expanding net metering or maintaining it for long periods of time will drive up power prices. Without government support, solar energy is non-viable, according to a 2015 study by the Massachusetts Institute of Technology.
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