At the end of 2008, the Japanese government projected that its economy would have zero growth in the fiscal year ending March 2010. To put it in perspective, that’s Japan’s first such projection in seven years, and it’s set against the worst stock showing in its history.

All the same, the solar energy market appears to be weathering the storm better than most. At the beginning of the New Year, giant electronics manufacturer Toshiba announced that it was entering the utility scale solar photovoltaics market, and it did so predicting it could grow the photovoltaics business to $2.2 billion a year by fiscal 2015.

In December 2008 Toyota announced it would show its first operating loss in 70 years. But in the tradition of Japanese business – investing in innovative technologies during recessionary times – Toyota embarked on its newest venture.

A report by Yuri Kageyama in BusinessWeek said that Toyota is secretly developing a vehicle that will be powered entirely by solar energy. Expected to be years in the making, the new electric vehicle reportedly will get some of its power from solar cells equipped on the vehicle and will be recharged with electricity generated from solar panels on the roofs of homes.

Last November, Sharp, the world’s second largest manufacturer of photovoltaic cells, revealed plans to build several solar power-generating plants with Italian utility Enel to maintain competitive leadership. The $1.05 billion plan with Enel will allow Sharp to build several solar power-generating facilities over the next four years. Sharp will collect royalties from Enel, and both companies will partner with another company to split the initial cost of a new factory in Italy that will make so-called thin-film solar cells. Industry experts believe that thin-film technology requires far less silicon and thus offers a more efficient manufacturing process than traditional panels.

Sharp, which has a production line at a facility in Nara, claims the thin-film solar panels can be made five times faster and with 100 times less silicon than the standard crystalline silicon type and are better suited for large-scale industrial applications such as power plants. The company expects to open a $760 million state-of-the-art thin-film panel plant in neighboring Osaka in 2010 that will be the model for the plant it plans to build with Enel in Italy.

Reuters reported last month that Japan plans to bring back subsidies for solar panel equipment that years earlier had been ceased. Japan’s Ministry of Economy, Trade and Industry expects the subsidies to provide relief as the world's fifth-biggest emitter struggles to cut its greenhouse gas emissions.

Government support is key

The Japanese lead in solar energy production is due in no small part to the support of its government, which will foster the manufacture and usage of solar panel equipment to the tune of 9 billion yen ($99.6 million) in the first quarter of 2009 and perhaps more in the next fiscal year. The government also plans to have more than 70 percent of newly built houses equipped with solar panels by 2020.

The Japanese government will also offer a subsidy of 70,000 yen per kilowatt of equipment to be installed next year, and forecasts that about 35,000 applications would be filed between January 13 and March 31. Kyodo News reported that the government aims to have 30 percent of all homes installed with solar panels by 2030 as part of its effort to fight global warming.

Under the target, Kyodo News said, the number of solar-powered households would increase to 14 million from the current 400,000, and the capacity of such generation would expand 30-fold from the current 1.3 million kilowatts.

The Japanese government also plans to set up a research institution in fiscal 2008 at an estimated cost of 2 billion yen to develop new, low-cost solar panels so that ordinary households can install them.