Executive Summary
There is an increasing gap between Japan’s renewable energy targets and actual deployment. While the country has significantly expanded its installed renewable energy capacity since the Feed-in Tariff (FIT) was introduced in 2012, renewable energy development has slowed. There are concerns about whether Japan can meet its 2030 target of 36%–38% renewables in the power generation mix and achieve carbon neutrality by 2050.
Fossil fuel proponents argue that renewables cannot ensure a stable energy supply, using this narrative to justify continued reliance on fossil fuels, especially liquefied natural gas (LNG). The latest 7th Strategic Energy Plan (SEP) reflects this view and includes a scenario where LNG imports increase if renewable expansion remains sluggish.
Structural and institutional bottlenecks have prevented renewable electricity from effectively integrating into Japan’s national grid. From 2010 to 2023, the share of renewable energy in electricity generation rose from 9.5% to 22.9%. However, annual growth rates have declined, curtailment has increased, and future deployment is uncertain.
In fiscal year (FY) 2023, renewable power generation increased by just 5.9%, the lowest rate since 2010, and curtailment reached a record high of 1.88 gigawatt-hours (GWh). This highlights an imbalance between capacity expansion and electricity system integration, driven by grid inflexibility, weak planning coordination, and market misalignment.
A key structural issue is the limited commitment of major electric utilities to domestic renewable energy development. Despite owning around 75% of Japan’s installed power capacity, they have invested minimally in proven technologies such as solar and wind. Instead, fossil fuel and nuclear assets are prioritized, and the limited renewable energy projects implemented are overseas. Weak regulatory enforcement encourages this reluctance to shift to renewables. Although utilities legally must source 44% of their total electricity from non-fossil sources by 2030, there are no financial penalties for non-compliance, and market incentives remain underdeveloped.
Utilities have also underutilized the Non-Fossil Certificate (NFC) system, which allows them to meet procurement targets without owning generation assets. Most NFCs purchased are derived from non-renewables, such as nuclear. Limited supply and a lack of transparency have further discouraged meaningful participation.
Grid access and curtailment remain persistent challenges. In resource-rich regions such as Kyushu and Hokkaido, renewable developers face delays and high grid access costs. Limited transmission capacity and dispatch rules that prioritize thermal power plants (exempting them from curtailment below 30%-50% of output) further restrict renewable generation.
Japan lacks a comprehensive framework for transmission development. Renewable generation is concentrated in rural and coastal areas, while demand centers are in metropolitan regions. Long-distance transmission remains underdeveloped due to complex permitting processes and transmission operators’ limited finances. This creates a physical and economic gap between renewable energy supply and demand.
The urban-rural divide is further reflected in renewable energy development patterns. Urban areas face land scarcity and higher project development costs, while rural regions host most large-scale renewable installations. Coordinated policies and infrastructure investment are needed to connect these locations.
Several regions in Japan have demonstrated that meaningful progress is possible. Prefectures such as Fukushima, Saga, Akita, and Hokkaido have set local renewable energy targets, engaged communities, and mobilized regional finance to support clean energy expansion. These subnational efforts have increased renewable deployment and offer replicable models.
Japan should focus on scaling these successful regional approaches instead of relying on fossil fuels for backup. Priorities should include reforming grid access rules, modernizing market design, strengthening enforcement of existing NFC obligations for major utilities, and enabling deployment paths such as power purchase agreements (PPAs).
Report’s key findings and executive summary in Japanese: 日本の再エネ導入拡大の主な障壁
Press release: English | Japanese
Fact Sheet 1: Key barriers in Japan’s renewable energy development (日本の再エネ導入拡大の主な障壁)
Fact Sheet 2: Regional solutions to Japan’s renewable energy barriers: Lessons from Akita and Fukushima (自治体による日本の再エネ導入障壁の打開策：秋田県と福島県に学ぶ)