The list of countries with solar feed-in tariffs seems to be growing every week. Europe has dominated the scene for years, with Germany and Italy leading the way. But now China is implementing a feed-in tariff, and even Japan is joining the fray to increase its renewable energy production. That makes the U.S. the only one of the world's four largest economies without a feed-in tariff.
Different from any other market
Countries with a lot of land like the U.S. have space to put solar panels in the desert, rooftops, or even within large cities. But in Japan people are squished onto a few relatively small islands, and space is a premium they just can't afford. So more than any other area, efficiency is going to extract the most value in Japan's solar market.
Japan's feed-in tariff doesn't kick in until mid-2012, so manufacturers will have to wait a while to start seeing demand. And the goal of 30 GW of renewable energy in the next decade also includes wind, biomass, geothermal, and hydroelectric power. But the biggest winner should be solar power, which is becoming competitive in high-energy-cost areas even without a generous feed-in tariff.
Tired of relying on nukes
This is a big move for solar, but it shouldn't come as a surprise that Japan is looking for new energy sources. After the Fukishima power plant disaster, Japan had to rethink its reliance on nuclear power. Wind and solar power were two natural fits for Japan because of available offshore wind locations and the ability to install solar on rooftops.
Foolish bottom line
The move to expand demand in China, Japan, and the U.S. will boost the entire industry, but it's just what's needed for some of the companies hit hardest in the second quarter. LDK Solar
Interested in reading more about solar? Add your favorite solar stock to My Watchlist, which will find all of our Foolish analysis on this stock.Fool contributor Travis Hoium owns shares of LDK Solar, SunPower, and has sold put options in SunPower. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.
Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.