General Electric Co. (GE) is aiming to build up its nascent solar energy business on a scale of its $6 billion wind-turbine unit, announcing plans Thursday for what it said will be the biggest photovoltaic panel factory in the U.S.
"We're looking to make solar look like [GE's wind business] over the next five years," said Victor Abate, vice president of GE's renewable energy division.
GE, based in Fairfield, Conn., will pick a site for the factory within the next three months or so, Abate said in an interview.
The plant will employ 400 people when it opens in 2013 and produce thin-film solar panels sufficient to generate 400 megawatts of electricity annually, or enough to power 80,000 homes a year.
SolarWorld AG (SMW.XE), of Germany, currently operates the largest solar manufacturing plant in the U.S., producing panels capable of generating about 350 megawatts annually, although GE's panels will be based on a different technology.
Abate said GE will have invested $600 million in solar technology and commercialization by the time the new panel factory opens. The sum includes its acquisition of Colorado-based PrimeStar Solar Inc.--in which GE has held a majority stake since 2008 but completed Tuesday--as well as internal research efforts and the cost of the factory.
"We wanted to get to a technology leadership position before we scaled" up the business, Abate said.
He also said technology from French power-conversion company Converteam, which GE is in the process of buying, will complement GE's solar effort by providing utilities and other customers with "turn-key" solutions for converting sunlight to grid-ready electricity. Last week, GE announced a $3.2 billion deal to buy most of Converteam.
The National Renewable Energy Laboratory, part of the U.S. Energy Department, has measured a 12.8% efficiency rating for the thin-film solar panels produced by PrimeStar, a record for the technology.
Some conventional solar panels are more efficient at converting sunlight to electricity. But GE contends its technology is cheaper, and it also said it expects to improve the performance.
Abate declined to disclose GE's current revenue from the solar sector, although he called the figure relatively small. Still, he said he expects GE's solar effort to evolve along the lines of its wind-turbine operation, which had "a couple hundred million dollars" in revenue in 2002 but has grown to an estimated $6 billion annual business.
GE said Thursday that it already has about 100 megawatts of new orders for solar panels based upon the thin-film technology, including a 60-megawatt order from utility NextEra Energy Inc. (NEE).
Global demand for solar panels and related technology is expect to grow to 75 gigawatts over the next five years, from about 15 gigawatts this year and 2 gigawatts in 2007.
Meanwhile, Abate said a number of factors will determine site selection for GE's new panel factory, including the availability of state and local tax incentives.
GE's anticipated low overall federal income tax bill for 2010 has recently become a high-profile controversy, but Abate said the issue won't have a bearing on the factory site.
"We're going to put the factory where it makes the most economic sense" for GE, he said. "Clearly, [the availability of various tax incentives] will go into that," as will issues such as proximity to existing GE facilities and other resources.
