Itochu will spend around $8.18 billion (or 1.2 trillion yen) to increase the generation capacity of the solar and other renewable energy facilities it is developing in the United States by 150% to around 10,000 MW by 2030.
Itochu is currently developing 27 solar farms in the United States, but the number of projects is expected to rise as the Japanese trading giant looks into the construction of wind farms. The company plans to increase its operating expenses budget for land acquisition and construction of green power plants in the country from around $5.5 billion (800 billion yen) to about $13.8 trillion (2 trillion yen).
While it will tap into its resources, Itochu plans to finance this expansion mainly from loans from various banks and investment funds.
In 2020, Warren Buffett’s Berkshire Hathaway announced that it took a 5% stake in Itochu and four other Japanese trading houses. Buffett traveled to Japan to meet with their leadership last April. This February, Berkshire Hathaway said it had raised its stake in the five companies to about 9%.
Itochu launched its first fund for renewable energy projects in the United States 2023, financed by Sumitomo Mitsui Trust Bank and Tokyu Land, among others. The fund’s assets will grow to $500 million by September.
It also has plans to establish new funds in the future and raise money from non-Japanese companies in South Korea, Singapore, Canada, and other countries.
The Biden administration offers subsidies and tax incentives for investment in the renewable energy sector via the Inflation Control Act passed in 2022. According to the U.S. Energy Information Administration, American solar and wind power generation are expected to climb by 70% and 8%, respectively, between 2023 and 2025.
Growth in the renewable energy sector in the United States is expected to continue regardless of who wins the November presidential election.
Japanese companies are responding by increasing their U.S. investments in renewable energy. Mitsubishi Corp. will nearly double its American solar power generation capacity to about 1.1 million kilowatts by the end of 2025. Tokyo Gas put a large solar power plant in Texas in full operation in December.
