The country that used to produce half of the world’s solar cells is making strides toward reclaiming its former glory—and is poised to riding out the current solar panel glut with relative ease, according to The Economist. The article profiles Japan’s resurgent solar power sector, which saw its market share eroded to an average of 20% by its primarily Chinese and Taiwanese challengers over the past five years but has not lost its competitive edge.

As the solar industry ballooned with the initial success of solar subsides and incentives in Germany and Spain, and cheaper Asian rivals threatened to send the Japanese solar industry into the dust, Japanese solar manufacturers have managed to stay in the foreground. By focusing their energies on improving their technology and recalibrating their business models, they have become known for developing “the most sophisticated kit, respected brands and healthy balance-sheets,” according to Travis Bradford, president of solar advocacy group The Prometheus Institute. And that’s not all:

Excess supply has forced the prices of solar panels down by more than 40% this year. In Asia factories that recently cropped up are running at 40% of capacity, with a huge shakeout expected, explains Joe Boyce of Gaia Consulting. But Japanese makers are protected because they can manufacture cells less expensively than European firms and have better technology than Chinese ones. They are also sheltered in their home market, where customers prefer domestic products.

With solar panel makers like Sharp and Showa Shell taking a leaf from their American and European rivals’ books and heading into energy generation, many analysts have indicated that the outlook for Japanese solar is bright. Some final words to take away:

Many Japanese solar firms are in fact expanding. The country’s four biggest—Sharp, Kyocera, Sanyo and Mitsubishi Electric—are investing billions of dollars to double their production, at least, over the next three years. They expect an increase in demand owing to growing subsidies for renewable energy in America and Japan. The Japanese government reintroduced generous handouts for solar power this year. These had stopped in 2006, when it had seemed that the market could support itself. Between April and June domestic sales increased by 80% in volume, while sales elsewhere slumped. Goldman Sachs says solar sales in Japan may double next year if the Democratic Party of Japan [DPJ], an opposition party with green policies, wins a general election on August 30th, which it is expected to do.

The DPJ’s landslide victory this past weekend will undoubtedly usher in a whole host of changes, of which solar is only a part. But you can count us among the curious many as we await news of further developments, especially as we warily monitor the solar space at home. (Hint: things have been a little stressful.)