Since Japan's electricity market deregulation in 2016, renters can freely choose their power provider. Switching to an alternative energy company can save ¥1,000–3,000 per month. This guide by rental real estate experts covers the switching process, selection tips, and rental-specific limitations.
Reviewed by: Nobuyuki MoriPresident, M-Assets Co., Ltd. / Licensed Real Estate Transaction Specialist (Miyagi #018212)
As of April 2016, when Japan fully deregulated the retail electricity market, households gained the freedom to choose their power provider. Prior to this, homes received electricity exclusively from regional utilities (such as Tokyo Electric Power and Kansai Electric Power). Today, you can select from numerous alternative energy companies based on your preferences.
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For renters, the key point is that switching your power provider is your right as a tenant. You do not need permission from your landlord or property management company—you can switch at your own discretion. However, there are exceptions: if your building has a bulk electricity contract covering the entire complex, individual switching may not be possible.
The savings you'll achieve depend on your usage and the plan you choose. Here are typical estimates:
This translates to annual savings of ¥10,000–30,000 or more, which is worth considering for renters looking to reduce overall living costs. Additionally, if you choose an alternative provider that offers bundled discounts with gas service or point rewards, you can achieve even greater savings.
When selecting an alternative energy company, we recommend comparing options across these five criteria:
1. Basic charge and variable rate balance If you live alone with low usage, a plan with a low basic charge works best. For families, prioritize plans with lower per-unit rates.
2. Minimum contract term and early termination fees Plans with 2-year lock-in periods or cancellation fees can be inconvenient when you move. Since renters often relocate, plans without lock-in periods or cancellation fees offer peace of mind.
3. Verify service coverage area Some alternative providers have limited service areas, so always verify that your current address falls within their coverage zone.
4. Understand fuel cost adjustment mechanisms Electricity rates fluctuate monthly due to fuel cost adjustments. Check whether caps are in place and compare stability against regulated utility rate plans.
5. Customer support quality Consider whether the company responds quickly to outages and billing issues, and whether they offer phone or chat support—these are important factors in your decision.
The switching process is straightforward. No installation work is required, and there is no risk of a power outage.
Make sure to confirm these three rental-specific considerations:
Check for bulk electricity contracts: Some buildings have bulk electricity contracts that cover the entire complex. In such cases, individual switching is generally not possible. Verify with your property management company or building association.
Relocation procedures: If you move outside your provider's service area, you'll need to switch to a different company at your new location. Since you'll need to cancel and recontract, choosing a plan without lock-in periods provides peace of mind.
Response during outages: Even after switching to an alternative provider, power restoration during outages is still handled by your regional utility (transmission and distribution company). Service quality remains unchanged.
Since the electricity market surge of 2021–2022, many alternative providers have withdrawn or halted service. The market continues to undergo restructuring, so when choosing an alternative company, we recommend confirming their financial stability and supply track record. Even if a provider withdraws, there is a "final supplier of last resort" mechanism that automatically transfers supply to a regional utility, so you won't suddenly lose power.
Electricity deregulation is a cost-saving strategy that renters can actively take advantage of. No installation work is needed, and you don't need your landlord's permission. By choosing a plan that fits your lifestyle, you can reliably reduce your monthly electricity bills. Consider reviewing your provider when you move or at any opportunity. More alternative companies now offer plans that balance cost savings with environmental responsibility, giving you choices aligned with your lifestyle.
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Electricity, gas, and water costs are among the most manageable fixed expenses in rental living. By switching to alternative energy providers and making simple lifestyle adjustments, you can save over ¥10,000 annually as a single resident, or exceed ¥30,000 as a family. This article provides practical utility-saving strategies tailored to different household types, from the rental housing perspective.
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