The solar PV industry just got a little bright. The government of Japan has approved a new feed-in tariff plan for the country that will pay developers of solar energy generation a princely $0.53/kilowatt-hour for 20 years. That’s nearly double the rate that Germany currently pays.

Japan is seeking to replace much of its nuclear power generation following last year’s disaster at its Fukushima reactors. The country does not plan to replace nuclear power — which had produced about 30% of the country’s electricity — completely although two nukes were restarted last week.

The announcement of the Japanese program is boosting shares in First Solar Inc. (NASDAQ: FSLR), SunPower Corp. (NASDAQ: SPWR), Trina Solar Ltd. (NYSE: TSL), Suntech Power Holdings Co. Ltd. (NYSE: STP), and Yingli Green Energy Holding Co. Ltd. (NYSE: YGE). Japan’s Sharp Corp. (OTC: SHCAY) is also getting a bump.

Another company to watch over the next few months might be 3M Co. (NYSE: MMM), which today announced the completion of its new flexible thin-film plant expansion in Missouri. Flexible thin-film, similar to First Solar’s technology, is much cheaper than the silicon-based manufacturing at the other makers. 3M claims that its technology

can achieve significantly lower balance of systems (BOS) costs by requiring less installation time, removing the need for metal racking, and reducing logistics expenditures … [and] may also enable lower module manufacturing costs by allowing manufacturers to commercialize large area modules assembled in a continuous roll-to-roll process.

Japan added 1,300 megawatts of solar PV in 2011 and is expected to install an additional 2,400 megawatts of solar PV generation this year, an additional 3,400 megawatts in 2013, and 4,000 on tap for 2014.

The biggest gainer on the news is Suntech, the world’s leading manufacturer of solar panels, up more than 6%. First Solar is up about 4.5%, while Sharp is up 3%. Yingli and Trina have given up earlier gains of around 3% and 8% respectively, and now trade down slightly on the day.

Paul Ausick

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