First Solar, Inc. (NASDAQ:FSLR) is building about 250 MW of solar projects in Japan, which is expected to become the world’s second largest solar market by the year-end. Japanese government is offering incentives for the development of cleaner energy sources. Karl Brutsaert, director of business development at First Solar, said yesterday in Tokyo that the company’s Japan strategy is to build projects, manage the construction phase and invest in utility-scale projects, reports Bloomberg Businessweek.

First Solar

First Solar to invest $100 million in Japan

The Tempe, Arizona-based company relies heavily on North American markets for its revenue. The company last year acquired Japanese high-efficiency panel maker TetraSun. First Solar set up its office in Japan in November 2013. The James Hughes-led company is currently working with local partners to develop solar stations of different sizes.

First Solar has announced to invest $100 million in Japan. After the 2011 Fukushima disaster, Japanese government introduced a feed-in tariff program in 2012 to promote clean energy. Brutsaert says rooftop installations in Japan would grow at exponential rates given land constraints in the country. Notably, rooftop panels are still a small contributor to the company’s sales. About 70% of its revenue comes from large utility-scale projects.

Bank of America reiterates its ‘underperform’ rating on First Solar

First Solar is also expanding aggressively in the Middle East, Australia, India and South America. In June, the company said that it had secured $290 million in loan to build the largest solar farm in South America. That 141MW project is coming up near the city of Copiapo in Chile. On August 5, the U.S. company revealed plans to develop a 45MW solar project in India. Electricity produced by this project will go to the Telangana State Power Distribution Company.

Bank of America reaffirmed its Underperform rating on First Solar in a research note on Tuesday. However, the research firm increased its price target from $50 to $55. The revised price target reflects a 23% downside.

First Solar shares inched up 0.45% to $71.34 in pre-market trading Wednesday.