Energy Efficiency Investment Promotion & Demand Structure Transformation Support Program (Energy Efficiency Subsidy)

1. Overview

The Energy Efficiency Subsidy is a grant available for upgrading outdated equipment to high-efficiency, energy-saving technologies in existing factories and business facilities in Japan. The subsidy rate varies depending on whether the business is categorized as a large enterprise or a small-to-medium-sized enterprise, offering potential funding from one-third to two-thirds of the investment amount, up to a maximum of 4 billion yen. This program is consistently funded annually, with approximately 200 applications each year (with a supplementary budget of 232.5 billion yen for FY2023). Commonly supported upgrades include:

（1） Heat source equipment updates (boilers, chillers, and cogeneration systems)

（2） Production equipment updates (industrial furnaces, printing machines, and linen facilities)

2. Key Considerations

Several critical points must be considered:

（1）Businesses must apply for the subsidy during the typical application period from March to June. Subsidies are granted only after the energy-saving effects have been evaluated and approved by the subsidy organization.

（2）Eligibility for the subsidy requires that the investment involves upgrading from existing equipment to high-efficiency, energy-saving devices and that the investment is expected to achieve a specified reduction in energy usage.

（3）Application documentation must include historical energy usage data, quotations for the planned equipment, and calculations of anticipated energy savings. The application requirements are detailed and require substantial effort in preparation.

（4）Preparing an application for the Energy Efficiency Subsidy generally requires three to four months of preparation time.

3. Preparation for Application

Companies in Japan planning to upgrade outdated production or heat source equipment to high-efficiency, energy-saving technologies should consider applying for the Energy Efficiency Subsidy. Additionally, there are other subsidies available for renewable energy facilities (such as solar power installations) and for updating air conditioning systems in office buildings and office blocks. 

If considering applying for these subsidies, it is advisable to consult with Deloitte Touche Tohmatsu for expert guidance.

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