Recall that Japan was one of the complainants in the Ontario feed-in tariff WTO case. As the Washington Post explains, Japan has a similar program:
The tariff, launched in July, obligates utility companies to buy electricity from renewable sources — solar, wind and geothermal, for example — at fixed prices. In most cases, the utility companies are buying the renewable-generated power from private individuals and companies.
...
The feed-in tariff is fixed at an artificially high price to encourage start-up investment. The investors, in many cases, aren’t cutting-edge technology firms, but farmers, lumber companies and local governments. Once they install solar panels, they also moonlight as power-generation companies.
Under the terms of the feed-in tariff, they sell their renewable-generated energy to the local utility company at rates guaranteed for 20 years. The rates vary depending on the source, but solar is the most generous. When the tariff was unveiled, sellers could get about twice the rate in Germany and France.
Japan recently cut that rate by 10 percent, a change that applies to new projects, not those underway. But analysts say that the reduction is unlikely to slow interest among solar developers.
Of course, Japan's program does not have a local content requirement, which is what everyone found problematic about Ontario's measure.
But what about the question of whether there is a subsidy here? The way the program is described above ("an artificially high price to encourage start-up investment"), it sure seems to be. How about under the AB's "benefit" analysis? Well, the rate is high compared to the rates in other countries, according to the article, so perhaps even under the AB's recent reasoning it would qualify as a subsidy.
As we know, however, that doesn't necessarily means it violates WTO rules. And I haven't heard any suggestions that someone might challenge Japan's program at the WTO. All of which makes clear, it could be argued, that clean energy programs can be run consistently with WTO rules.
