First Solar Inc. (FSLR – Analyst Report) has inked an agreement with JX Nippon Oil & Energy Corporation for the delivery of photovoltaic (PV) solar modules in Japan through 2015. This is a part of First Solar’s plan to devote roughly $100 million in building solar power plants in Japan.

First Solar’s expansion in Japan is complemented by its strategic acquisition plans of TetraSun. TetraSun has significant expertise in silicon PV technology and has achieved world records for silicon cell efficiencies at companies like SunPower Corp. (SPWR – Analyst Report).

TetraSun is the developer of high-efficiency solar panels. It has developed a break-through cell architecture that has the potential to convert 21% sunlight into electricity at lower manufacturing costs in comparison to conventional multi crystalline silicon solar cells. Being simple, the design is cost-effective as it uses the large-format 156 mm n-type wafers. This automatically removes the need to use expensive silver and transparent conductive oxide.

As a part of the current JX Nippon deal, First Solar plans to develop and produce new technology leveraging the expertise of TetraSun. JX Nippon along with First Solar will provide solar energy solutions to meet Japan’s power requirements. First Solar will be selling its silicon solar panels, which are more efficient than its cadmium-telluride solar panels, through JX Nippon Oil & Energy.

We note that Japan has recently been a happy hunting ground for solar companies in search for new markets. Japan has intensified its renewable energy development efforts following the Fukushima nuclear disaster in March 2011. In fact, the country is expected to become the second largest market for solar products in 2013 after China. First Solar – the largest U.S. solar company – is thus teaming up with Japanese counterparts to develop, build and operate solar power plants.

In the Japanese market, First Solar expects to open a factory that will produce about 25 megawatts to 50 megawatts of TetraSun panels in 2014. The company pointed out that the Japan government has set a target of installing 28 gigawatts of energy-producing capacity from solar power by 2020.

Recently, First Solar posted robust third quarter 2013 results with adjusted earnings up 79.5% year over year. The significant rise was driven by higher systems business project revenues, increased manufacturing utilization and higher module sales to third-party customers.

First Solar is investing substantially to install emission-free renewable set-ups, which will subsequently help utility distribution companies to expand their renewable portfolio. The company has a proven record to build large projects in a cost effective manner.

First Solar currently has a Zacks Rank #2 (Buy). Other solar module manufacturers which are worth considering are Enphase Energy, Inc. (ENPH – Snapshot Report) andTrina Solar Ltd (TSL – Snapshot Report), each with a Zacks Rank #2 (Buy).