Japan's Ministry of the Environment reportedly plans to eliminate purchase subsidies for conventional silicon solar panels on new installations starting in fiscal year 2027, while requesting roughly 28 billion yen for perovskite solar cell support in the same fiscal year, about four times the ministry's FY2026 budget of 7 billion yen. Subsidies for installation labor and materials, and for already-approved projects, will continue; only the purchase subsidy for the silicon panels themselves is being phased out.
A perovskite solar panel on display at a community center in the town of Okuma, Fukushima Prefecture, Japan. Image credit: AFP-Yonhap News
The ministry's stated rationale is that silicon panel prices have fallen by roughly half from their peak amid global mass production, so a purchase subsidy for the panels themselves now delivers limited benefit to Japan's domestic industry. More than 90% of the solar panels installed in Japan are imported, and roughly 80% of those imports are Chinese-made; continuing to subsidize their purchase does little to build up manufacturing capacity at home.
The shift is part of a broader push to build a domestically-based perovskite supply chain. Japan is the world's second-largest producer of iodine, a key perovskite raw material, with reserves the U.S. Geological Survey estimates at roughly 4.9 million tons, well ahead of top producer Chile's approximately 750,000 tons. The country has set a national target of about 20 GW of perovskite deployment by 2040, roughly equivalent to the output of 20 nuclear reactors, and is backing that target with programs including the GX Supply Chain Support Program, which is subsidizing about half of Sekisui Chemical's 315 billion yen perovskite manufacturing investment in Sakai, and a reduced fixed-asset tax rate for perovskite installations running through FY2028.
The subsidy change comes alongside a wider energy security package the Japanese government unveiled around August 26-27, responding to supply risk from the closure of the Strait of Hormuz. That package prioritizes renewable energy, including perovskite solar, next-generation geothermal power, and offshore wind, alongside nuclear restart plans and diversified fossil fuel procurement.
Japan has been steadily building out this kind of policy support for perovskite over the past year, including government funding for Panasonic, Ricoh, and EneCoat to advance the technology and subsidies for overseas trials of perovskite solar cells.
