Canadian Solar Inc., the fifth largest manufacturer of solar panel in the world, now has plans to be the first foreign company to make a solar plant in Japan. Scheduled to start construction as soon as fiscal year 2013, the Ontario-based company is looking to take advantage of new pricing incentives from the Japanese government on renewable energy sources. After the meltdown at the Fukushima nuclear plant last year, nuclear power is not very popular among most of the public right now. Many are expecting that by next year there will be an explosion in the demand for renewable energy sources, with solar power being the largest.
The Canadian firm will be investing several billion yen and is designing the plant to be capable of producing 150 megawatts per year. Prior to this announcement, Canadian Solar already had plans to build a 2,000 kilowatt solar power facility in Tsu, Mie prefecture, which is currently scheduled to begin operation in March 2013. The company still has not decided on a location for its latest facility, but they are looking at Fukushima prefecture and other areas that were devastated by the March 2011 disasters.
With the government’s new feed-in tariff for renewable energy, utility companies will be required to purchase their solar generated electricity from companies for 42 yen per kilowatt-hour, a very profitable buy-back price. A SMBC Nikko Securities Inc. analyst has mentioned that with prices that attractive, foreign companies should not hesitate to enter Japan’s market. Canadian Solar currently has about 3% of the nation’s market, and plans to increase that to 10% within the next five years.
Two of Japan’s domestic companies have already announced their plans to build some of the largest solar plants in the country. Softbank will be constructing in Hokkaido, to the North, while Kyocera will build theirs in southeastern Kagoshima prefecture. Yingli Green Energy Holding Co., from China, and SunEdison, from the U.S. have both announced their entry into Japan’s solar power market, while Suntech Power Holdings Co., also from China, will be renovating its maintenance facility in Nagano prefecture to provide better customer service.
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