As part of reconstruction efforts, the government’s designated special zones in the disaster-stricken areas will offer tax breaks and relaxed regulations to attract companies.

Solar and other renewable energies are drawing interest in Japan in view of the tight electricity supply, especially as the nation is now without nuclear power-generated electricity for the first time in 42 years with operation of all of its 50 commercial reactors suspended.

Ontario-based Canadian Solar, the world’s fifth largest solar module maker, plans to build a plant in Japan as early as fiscal 2013 to become the first foreign manufacturer to produce solar panels in the country, Marketwatch reported Saturday.

Canadian Solar Inc. is currently in negotiations with local governments in Fukushima and Miyagi prefectures, and expects to invest several billion yen for the new plant with an annual production capacity of 150 megawatts of solar panels.the Nikkei reported.

The firm is only one of many domestic and overseas companies vying to strengthen their position in the Japanese market as a new government incentive program starting this July is expected to spur demand for green energy in the wake of the Fukushima Daiichi nuclear disaster.

The company is reviewing candidate sites in Fukushima Prefecture and other areas devastated by the March 2011 earthquake and tsunami. It also is considering including a training center for solar-panel maintenance and other works at the new plant to help boost employment in the disaster-hit region.

Under the government’s renewable-energy feed-in tariff scheme, major electric utilities will be required to buy all electricity generated in principle from solar power by companies, households and others for 42 yen ($0.52) per kilowatt-hour, including sales tax, a price almost equivalent to that demanded by green-energy providers.

“Japan has set a high buyback price, which is very attractive, so there is no reason for foreign companies not to enter the market,” said Hiroharu Watanabe, a senior analyst at SMBC Nikko Securities Inc.

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