Japan to allocate $1.3 billion to clean energy companies

Japan plans to allocate 210 billion yen ($1.34 billion) to help companies that use clean energy to finance investments, Reuters reports.

In this way, the country seeks to increase demand for renewable energy and stimulate growth in the regions.

According to Juntaro Shimizu, director of the Green Transformation (GX) policy group at the Ministry of Economy, Trade and Industry, the scheme will run for five years.

He said companies that rely entirely on decarbonized electricity and contribute to the regions where it is produced will be eligible for subsidies covering up to half of their capital costs. Data center operators that meet the same criteria will be eligible to participate in the program.

The government plans to start accepting applications from eligible companies in fiscal year 2026 (beginning April 1).

Japan aims to have renewable energy sources account for up to 50% of its electricity mix by fiscal year 2040.

Progress toward the country’s renewable energy target has slowed in recent years. Offshore wind projects are facing rising costs, and solar initiatives are being delayed due to regional resistance.

The new subsidies are part of Japan’s GX 2040 Vision, a national program approved by the Japanese government in early 2025. The initiative aims to align decarbonization with industrial policy and economic growth.

According to the International Energy Agency’s (IEA) autumn report, global renewable energy capacity will double by 2030, increasing by 4.6 TW, but the outlook for its deployment in the US has worsened. Almost 80% of global growth in renewable energy capacity will come from solar energy, followed by wind, hydro, bio, and geothermal energy.