GE Invests $600M to Build Largest US Solar Plant

GE Invests $600M to Build Largest US Solar Plant

Looking back it's easy to pinpoint the moment the U.S. wind industry came of age: April 12, 2002, when General Electric won Enron Wind Corp.'s wind assets in a bankruptcy auction.

The conglomerate's $358 million bid has since mushroomed into a $6 billion dollar business and the fastest-growing electricity generation technology in the U.S.

Now GE is hoping to repeat that trick in solar energy. GE announced yesterday a $600 million investment to start manufacturing solar panels in a new factory slated to be the largest in the U.S.

The move is likely to shake up an industry locked in a near-permanent price war. GE is adapting -- and says it has bettered -- the same technology as the world's current high-volume, low-cost manufacturer, FirstSolar, based in Tempe, Ariz.

Rather than produce solar systems based on silicon, a technology which dominates in the panels found on most household and commercial building roofs, GE's is turning to thin-film materials.

In thin film panels, instead of building the solar cells on silicon wafers, sheets of glass are used to sandwich minuscule layers of active material, including a key ingredient, cadmium telluride (CdTe), which gives the panel their name.

GE says its approach produces the most efficient CdTe panels to date, citing an evaluation by the U.S. National Renewable Energy Lab. NREL found that GE's thin film panels convert 12.8 percent of light into electricity, surpassing all previous measurements for CdTe panels.

While only about three-quarters as efficient of conventional silicon panels, the lower manufacturing costs of CdTe thin film panels make them cheaper, measured by per watt of capacity, than any currently viable commercial technology.

Declining to reveal any pricing details, Vic Abate, GE's vice president of renewable energy, affirmed the company aims to be a price leader.

As part of the announcement, GE completed the acquisition of PrimeStar, Inc., a thin film pioneer that GE first took a minority stake in three years ago. In earlier news, GE has also bid $3.2 billion for Converteam, a maker of advanced electronics used to manage and produce renewable energy.

Combining its new solar technologies with existing offerings in power plant and transmission systems, GE is now able to offer utilities a full turnkey solar solution, said Abate.

Utility projects will be GE's main focus initially, he added, before broadening to commercial and industrial customers, he added.

Due to come on line in 2013, GE's new solar factory will employ 400 workers when operating, and create some 600 construction jobs before then.

The plant will be able to produce 400 megawatts worth of panels, enough to power roughly 80,000 homes per year.

The site of the new factory has not been finalized, Abate explained, but the company has narrowed the field down to a list of finalists. An announcement is expected within a few months.

In advance of the announcement, GE lined up agreements with commercial partners to buy the 100 megawatts of GE's solar panel production.

Some of these orders, Abate explained, are coming from renewable energy developers such as NextEra Energy, who have also deployed GE's wind turbines. Developers are exploring hybrid generation, Abate explained, combining large-scale solar and wind in the same site, an approach which can smooth out energy flows.

GE's announcement comes amidst a backdrop of commercial volatility in the nascent U.S. solar manufacturing sector, rising Chinese competition, and related political bickering about renewables subsidies.

In California, Solyndra made headlines for shuttering a state-of-the-art manufacturing facility last year, after taking a $535 million federal loan guarantee. The incident resulted in a firestorm of criticism over Obama's green energy policy from his Republican opponents.

For its thin film plant, GE is not tapping federal loan guarantees, Abate said.

Meanwhile, with costs falling rapidly for conventional silicon PV panels, China has rapidly become the world's volume producer, all but eliminating the possibility that such panels can be made in the U.S.

Public support for solar and other renewables is rising steadily. In the wake of Japan's nuclear disaster, a poll (pdf) by the Civil Society Institute / ORC International found 76 percent of U.S. citizens are more supportive of renewable energy than before the crisis.

GE is charging into a U.S. market that has risen to the world's second largest in recent years.

After peaking at 1.7 gigawatts in 2009, solar installations in the U.S. last year fell to 1.3 GW. With a total installed base of about 4 gigawatts going into 2011, according to financial analysts at Jefferies International, which predicts growth of another 2-2.5 gigawatts in the U.S. this year.

Worldwide, the U.S. trails only Germany, which deployed 6.7 gigawatts of solar last year. The global market grew by 14.9 gigawatts in 2010, is on track to expand by 18.4 gigawatts this year, and by 20.7 gigawatts next year, according to Jefferies.

Abate hopes GE can ride this growth to match its success in wind. "Over the next five years, 75 gigawatts of solar will be planted around the world. That's a couple hundred billion dollars," said Abate.

Image Credits: Screen shots of thin-film solar panel manufacturing courtesy of GE.