Energy Minister Bob Chiarelli says Ontario intends to comply with the WTO ruling, which means the province will change its domestic content requirements for the feed-in-tariff program for wind and solar projects.
The feed-in-tariff system _ established in 2009 _ set lucrative fixed prices for electricity generated by renewable projects such as wind turbines and solar panels.
The legislation had required participating electricity generators to source up to 60 per cent of their equipment in Ontario if they want to be eligible for generous subsidies.
Japan first complained to the WTO in 2010, arguing that the part of the province's program requiring made-in-Ontario parts for wind and solar farms breaches international trade law.
Government sources said Wednesday Chiarelli expects to have the legislation changed to comply with the WTO ruling by early next year.
In a speech Wednesday, Chiarelli expressed confidence in Ontario's burgeoning green energy manufacturing sector.
"We have confidence in the resilience of the clean energy manufacturing sector in Ontario," he told the Ontario Power Summit in Toronto.
"Ontario is not backing down from continuing to build a robust renewable energy sector that creates tens of thousands of good jobs."
Japan and the European Union had argued Ontario's incentives for green energy were illegal because they discriminated against foreign firms, a complaint that was upheld by a WTO adjudication panel last December. Canada appealed in February, but the WTO dismissed it in a decision released earlier this month.