Iran War Increases Oil Prices, Prompting Renewed Interest in Solar Energy in Japan

The Iran war, which began two months ago, has caused oil prices to rise, prompting discussions on renewable energy options in Japan, a country heavily reliant on Middle East oil imports. Government policies have introduced stricter regulations on megasolar projects due to environmental concerns and community opposition.

Japan plans to end subsidies for new industrial-use solar panels starting April 2027 and has submitted a bill to require recycling of old panels.

Hirata, executive director of Climate Integrate, stated at a news briefing last month that momentum for shifting to renewables remains weak in Japan. She noted perceptions of renewables as unreliable, costly, and dependent on China, despite increases in solar capacity in countries like South Korea and the Philippines.

According to Climate Integrate's analysis, Japan allocated 3.3% of its fiscal 2026 national budget to climate and energy measures, with renewables receiving 3% of that amount. Energy-conserving measures accounted for 52%, while fossil fuels and nuclear power received 21% and 10%, respectively.

Miyake, CEO of the Renewable Energy Promotion Organization, established Repo Storage a year and a half ago to offer off-grid solar systems. These systems, using imported panels and batteries, cost about ¥2 million for a 7 kW setup with 16 kWh storage, with a potential 10-year payback period.

Miyake explained that off-grid systems avoid grid connection requirements and subsidies, allowing use of internationally certified products. The company has sold about 30 units and is applying for a patent on technology to connect to the grid during emergencies.

, founded in 2014, operates agrivoltaic farms where solar panels are installed above crops. The company uses a method developed by retired engineer Akira Nagashima in 2004, blocking about 30% of sunlight. As of March 2024, Japan had issued permits for 6,137 agrivoltaic farms.

Citizens Energy Chiba raised funds by allowing citizens to own panels and has grown its capital to ¥500 million. These initiatives demonstrate ways to integrate solar energy with agriculture and reduce energy costs, amid rising oil prices following the closure of the Strait of Hormuz.