Local Gov't Looks to Tax Solar Panels in Japan

Mimasaka City preparing to submit ordinance draft to municipal assembly

2019/05/29 17:04
Kenji Kaneko, Nikkei BP Intelligence Group, CleanTech Labo
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The government of Mimasaka City, Okayama Prefecture, Japan, plans to introduce a "commercial power-generating panel tax (tentative name)," which imposes a tax on power producers in accordance with the installation areas of their solar panels.

The city is preparing to submit an ordinance draft to the municipal assembly in June 2019.

It is a non-legal special-purpose tax based on the Local Taxation Law. If the tax is implemented, it will be the first case in Japan. Before realizing the tax, it is necessary to gain agreement from Japan's Ministry of Internal Affairs and Communications (MIC) and get the understanding of major tax payers.

There are multiple mega (large-scale) solar power plants in Mimasaka City, and the city is one of Japan's most concentrated areas of solar power plants. While the city receives fixed property tax, the amount of the tax decreases as the depreciation of the power generation facilities proceeds. In view of such circumstances, Seiji Hagiwara, mayor of the city, aims to introduce a special-purpose tax targeted at solar power plants.

Specifically, the city plans to impose a tax of ¥50 per 1m2 panel area for 10 years (from fiscal 2020 to 2030). The tax is targeted at 10kW and higher-output solar power plants set up on the ground (excluding solar panels installed on the roofs of buildings).

The city expects a revenue increase of about ¥90 million and plans to use it for environmental protection, disaster prevention, improvement of living environment, etc.