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The Japanese Prime Minister's recent dramatic announcement that Japan would halt - at least for the time being - its nuclear expansion plans, provides a dramatic boost to renewable energy.

Until March's devastating earthquake, tsunami and nuclear meltdown, the government had plans for a steady increase in the number of nuclear plants in Japan, from the present 54.

Nuclear energy was expected to provide half the country's power needs by 2030, up from around 30 per cent in early 2011, when all plants were fully operational.

According to the Prime Minister's announcement, the percentage of renewable energy in the total power mix will more than double to 20 per cent by around 2021.

In fact, as I have already written, if you exclude hydroelectric power, only about 2-3 percent of Japan's present energy needs derive from renewable needs. So the increase over the coming 10 years is set to be huge.

The Prime Minister put the emphasis on solar energy, a sphere in which Japan already excels. He noted that solar energy should cost one third of what it does now by 2020, and one sixth of the present price by 2030.

Until 2004, Japan was the largest solar market in the world, although an easing of government subsidies saw it being overtaken by Germany.

At the end of 2010, Japan had an installed solar capacity of 3,622 MW, according to the European Photovoltaic Industry Association (EPIA), placing it third in the world behind Germany and Spain.

The EPIA had been forecasting that this figure would rise to as high as 12,650 MW by 2015, and around 28,000 MW by 2020. But these figures now look very conservative.

Unfortunately, investors in the West looking to profit from accelerated Japanese moves to solar energy will find their choices limited.

Most of the key companies are large, and solar energy is not their main business. In any case, not all are listed on US stock exchanges, so buying the shares may not be easy.

But having said all that, this theme is powerful, and even the large corporations should over the coming decade see a significant boost to profits.

Three Japanese companies - Sharp (OTCPK:SHCAY), Kyocera (KYO) and Sanyo [now Panasonic (PC)] - are among the global pioneers in solar energy, and they remain among the world's largest producers of solar cells, although in recent years they have been losing ground to low-cost Chinese rivals.

Sharp Corporation initiated solar research in 1959 and just two years later introduced a solar-powered transistor radio. Today it is the Japanese leader, although in the year to March 2011, solar business was responsible for only about 10 per cent of the company's total sales of around $34 billion.

In September 2010, it announced that it had developed a solar cell with a 42.1 per cent efficiency, the highest in the world.

It said its target was to develop by 2014, a cell with 45 per cent efficiency, and one with 50 per cent efficiency by 2025.

Kyocera Corporation is second in Japan behind Sharp in solar cells, and is ranked around 10th in the world.

In the year to March 2011, its Applied Ceramic Products division - largely solar energy business - produced 600 MW of solar cells and was responsible for about 17 per cent of the company's total $15 billion in sales.

Panasonic Corporation acquired a majority stake in Sanyo in December 2009, thanks to Sanyo's pioneering work in solar energy, and also for the company's leadership position in lithium ion batteries.

Panasonic has said it plans to invest more than $1 billion in expanding its newly acquired solar business, with the goal of becoming one of the world's three largest solar cell manufacturers by 2015.

Panasonic has also said that its aim is that energy-related revenues should comprise around one third of total sales by 2018, when the company celebrates its 100th anniversary.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: Solar Energy Set to Soar in Japan - 3 Key Stocks