Japan’s Ministry of Economy, Trade and Industry (METI) plans to set aside about 93 billion yen ($779 million) to help factories and small-sized businesses install devices to improve energy efficiency.
The ministry is asking for the budget to set up devices such as light-emitting diode lamps and boilers with better efficiency, according to a summary of requests included as part of a supplementary budget for the year ending March 31. It will be considered by the cabinet, Bloomberg said.
METI also plans to spend about 81 billion yen in response to grid issues the country is facing in order to accommodate more renewable energy.
The ministry wants to help set up energy storage systems at solar power stations or substations. Parts of the budget will also be spent to help clean energy producers in the region hit by the 2011 Fukushima earthquake and tsunami buy equipment, according to the document. The budget needs parliament’s approval.
Solar comprises the majority of Japan’s clean-energy installations since the introduction of an incentive program for clean energy in July 2012. Some utilities began announcing last year that their grid capacity is nearing its maximum to absorb intermittent solar power.
Extra Budget
The government on Friday approved a $26 billion extra budget for the current fiscal year to fund stimulus spending and help pull the economy out of recession.
The 3.118 trillion yen ($26.07 billion) extra budget for the stimulus, unveiled last month, includes funding for steps such as helping Japan’s lagging regions and households with subsidies and shopping vouchers and rebuilding after natural disasters.
In a show of commitment to fiscal reform, the government will not resort to fresh borrowing, while cutting new bond issuance by 757.1 billion yen from the initially planned 41.3 trillion yen for the current fiscal year ending in March.
Tokyo will fund the package with unspent money from previous budgets and tax revenue that have exceeded budget forecasts. Corporate profits have been boosted by aggressive monetary and fiscal stimulus policies under Prime Minister Shinzo Abe, even as the broader economy has struggled.
Higher profits by companies helped tax income in the current fiscal year increase by 1.725 trillion yen from the initially estimated 50.0 trillion yen. That marks the highest level in 17 years, allowing Tokyo to cut new bond issuance from the initially planned amount for the first time in eight years.
The world’s third-largest economy is expected to have returned to growth in the final quarter of last year after two straight quarters of contraction.
The government expects the stimulus to boost Japan’s GDP by 0.7 percent, while private-sector economists see a smaller impact.
