Assessment of Equity of Feed-in Tariff in Japan

Abstract

The diffusion of renewable energy such as solar photovoltaics (PV) is effective for global warming countermeasures. When focusing on residential PV, however, it is thought that PV installation is difficult for households without a sufficient income, as PV is still expensive. In addition, Feed-in Tariff (FIT) requires the surcharge of electricity consumers. Its burden is larger for a lower-income class than for a high-income class because the ratio of energy cost among the total expenditures is higher, and it is recognized as a problem from the viewpoint of "Equity". In this study, we conducted quantitative analyses of influences of FIT on households by income class and evaluated its equity, based on the actual data regarding a proportion of PV installation, surplus electricity purchase price for PV, surcharge cost, etc. under FIT in Japan. As a result, we find that the ratio of electricity cost among the total consumption expenditure (E/C) increases due to FIT for all income classes, but this impact is greater for low-income class. The index of E/C increasing point due to FIT for low-income class is three times more than that for high-income class. The difference by the income hierarchy becomes bigger due to FIT introduction.