Japan is beginning a shift to solar energy that lacks one ingredient: bank financing.
For lenders like Sumitomo Mitsui Financial Group Inc. (8316), a commitment to offer loans to solar ventures depends on a law to be passed today that will subsidize renewable energy, part of Prime Minister Naoto Kan’s initiative to cut Japan’s reliance on atomic energy after the Fukushima nuclear crisis.
Trading houses Mitsui & Co. and Mitsubishi Corp., insurers Munich Re and Tokio Marine Holdings Inc. (8766), and billionaire Masayoshi Son are among those ready to invest in solar power. For their businesses to become viable, they need utilities to buy electricity generated by the sun, wind and geothermal heat at above-market prices, known as feed-in tariffs.
Read the rest of the story: Japan’s Shift to Solar Power Hinges on Banks Ending Loan Drought.