GE’s grand solar plan: A 400 MW factory in Colorado

General Electric (s GE) has been plotting a solar empire for a few years now, and the industrial giant has finally settled on a place for the crown jewel of the plan: a 400 MW factory in Colorado to produce solar panels that use the same semiconductor compound as the successful First Solar (s FSLR).

GE announced Thursday night that it will build the new factory in Aurora, Colo., close to its solar research center and a small, existing factory of 30 MW that it inherited from buying PrimeStar earlier this year. GE was an early investor in PrimeStar, whose cadmium-telluride technology initially came from the National Renewable Energy Lab in 2007. GE became PrimeStar’s majority owner in 2008.

GE plans to start installing factory equipment in January 2012, but it will need time to test-run the equipment and bring the production lines online, as well as to get certification for the panels. Shipment is set to begin in “early 2013,” said Victor Abate, VP of GE’s renewable energy business. The company plans to make a customer announcement at Solar Power International in Dallas next week, Abate added.

GE said it picked Colorado, apparently over New York, because being closer to its solar research team in Colorado will help speed up its technology development and deployment. Indeed, rolling out its manufacturing plan quickly will be crucial for the company to compete in a market that has changed substantially since it formally announced it would do all it can to commercialize PrimeStar’s technology.

Falling solar prices

The prices for solar panels have fallen dramatically in the past year, to the surprise of many companies in the solar industry. The prices have fallen by 30 to 40 percent because of a pileup of solar panels in warehouses after government incentives in Europe — the largest solar market in the world — fell earlier this year.

Many manufacturers have suffered declining profits or widening losses this year, and several American companies have gone bankrupt, including Solyndra, SpectraWatt and Evergreen Solar. Even First Solar, which is the largest manufacturer of non-silicon solar panels in the world and known for its low-cost production ability, posted a big drop in earnings during the first half of this year.

Meanwhile, a host of companies are working on technologies that promise to beat cadmium-telluride solar panels in efficiencies if not price. A 400 MW factory is large but not nearly the size of manufacturing fleet of many top manufacturers today. First Solar runs factories totaling at least 1.4 GW, and it plans to expand that to 2.7 GW next year.

Others are building similar or larger manufacturing operations, including Abound Solar, which is adding 775 MW to produce cadmium-telluride solar panels, and Stion, which is building a factory that will reach 500 MW and produce solar panels using copper-indium-gallium-selenide. Taiwan Semiconductor Manufacturing Corp. just opened a 100 MW CIGS solar panel factory and plans to increase that production capacity to 1 GW by 2015.

GE understands it needs to roll out better, more efficient solar panels to attract buyers. In April of this year, the company boasted of having produced cadmium-telluride panels with 12.8 percent efficiency that appeared to exceed the cadmium-telluride solar panels from First Solar. First Solar then announced in July it had set a world record for cadmium-telluride cells by producing a 17.3 percent cell. The Arizona company also said it already could produce panels with 13.4 percent efficiency and expects to roll out panels in 13.5-14.5 percent efficiencies by the end of 2014 (panel efficiency tends to be lower than cell efficiency).

Abate said GE aims to produce panels with 14 percent efficiency when it begins shipping from the new 400 MW factory.

Abate said GE understands the changing competitive landscape and believes its expertise in developing and manufacturing a variety of technologies, along with its financial muscles, will enable GE to outshine rivals. GE already is a big wind turbine maker and power plant builder, and it just bought a maker of power conversion electronics and motors, Converteam, for $3.2 billion.

“When you put all that together, we have a clear, differentiating strategy to be the most cost-effective solar provider,” Abate said.

Photo courtesy of GE