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Solar cell manufacturer FirstSolar Inc. (FSLR - Analyst Report) announced that it will start constructing a 1.8 megawatt (MW) solar project in Kitakyushu-shi, Japan. FirstSolar will be using its CdTe Thin Film PV modules.    

This project marks the beginning of FirstSolar’s strategic investment in the Japanese solar module market. Earlier this month, the company announced that it will invest $100 million in Japan to develop solar projects. FirstSolar will also collaborate with Japanese companies to develop these projects.

Japan’s need for electricity is rising, particularly after the Fukushima nuclear power plant accident triggered a complete phase out of all nuclear reactors in the country. The last operating nuclear reactor was shut down in Sep 2013. Presently, the Japanese government is looking for alternate resources to meet the growing need for power in this very industrialized nation.

Japan has started to import coal to feed its coal fueled power plants. However, coal plants emit green house gases, a major cause of global warming. So, generation of electricity from renewable sources is the best possible remedy for Japan’s energy needs.

Japan is going to be a key energy market and the government has set a target to install 28 Gigawatt (GW) of solar energy power by 2020. Hence, FirstSolar’s entry into Japan, a market with clear growth visibility, is expected to fetch increasing returns on investment.

As present, solar modules have an edge over other alternate sources. In fact, the wide availability of solar energy along with high conversion rates makes it a popular alternate energy resource. Steady R&D by solar cell manufacturers has actually lowered the cost of solar power generation.

A report from the U.S. Energy Information Administration suggests that 20% of the total power generated in 2040 will come from renewable sources and solar photovoltaic will play a major role in it. FirstSolar will be a key player in this solar module market. The company has already manufactured solar modules in excess of 7 gigawatts (GW).

Operators in the solar cell industry, which look attractive at current levels, include Enphase Energy, Inc. (ENPH - Snapshot Report), JinkoSolar Holding Co., Ltd. (JKS - Snapshot Report) and Trina Solar Limited (TSL - Snapshot Report). All these stocks carry the same Zacks Rank #2 (Buy) as First Solar Inc.

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