The government wants to cut the country's dependence on nuclear power.
Last year, nuclear regulators introduced tougher safety guidelines for power plants. The regulators limited the lifespan of nuclear reactors to 40 years. They can grant extensions of up to 20 years under certain conditions.
Seven reactors at 5 power plants have reached, or will soon reach, the 40-year-mark.
The government has given the operators until next July to decide whether to apply for an extension or take the expensive step of scrapping them.
Industry ministry officials say they are considering ways to ease the financial impact and encourage the companies to decommission their old reactors.
Industry Minister, Yuko Obuchi said the government will help utilities to restart reactors that have been found to be safe. At the same time, she said, the government will help them decommission their reactors if they choose.
Japan's 48 commercial reactors are all offline. Nuclear regulators are studying safety measures at several plants to determine whether they can be restarted.