Japan’s parliament on Aug. 26 passed the bill that guarantees above-market rates for wind, solar and geothermal energy. The so-called feed-in tariff created a race to install solar panels when implemented in Germany and Spain.

“Though symbolically ground-breaking, there remain some unanswered questions regarding cost, surrounding infrastructure and regulation,” Naomi Fink, a Japan strategist at Jefferies & Co., said in a report on Aug. 25. in reference to the bill.

The nuclear disaster at Tokyo Electric Power Co.’s Fukushima plant has turned public opinion against atomic energy, according to newspaper polls. The passage of the bill is one of the first steps by Japan to expand its renewable energy industry into a 10 trillion yen ($130 billion) market by 2020 from 1 trillion yen in 2009.

Under the law, the trade and industry minister will set preferential rates and periods each year for renewable energy purchases. The bill that passed does not include what the rate will be when the law comes into force on July 1, 2012.

Investors have speculated about the size of the feed-in tariff since Trade and Industry Minister Banri Kaieda said in parliament on July 14 it would be up to 20 yen per kilowatt-hour for about 15 years. That compares with the price for electricity from the public grid of 13.77 yen for commercial users, according to Japan’s Agency for Natural Resources and Energy.