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GE To Build Largest Solar Factory In The U.S.

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GE announced Thursday that it’s planning to go big in solar panel manufacturing and will build the largest solar panel factory in the U.S., with an annual capacity of 400 megawatts of production of thin-film solar when it is up and running in 2013.   GE will spend $600 million on the project.

It’s a head on challenge to First Solar (FSLR), the largest maker solar panels made from thin layers of cadmium telluride. GE is going to manufacture the panels with the same composition of materials.

“Over the last decade, through technology investment, GE has become one of the world’s major wind turbine manufacturers, and our investment in high-tech solar products will help us continue to grow our position in the renewable energy industry,” Victor Abate, vice president of GE’s renewable energy business, said in a press release.

To jump start its efforts, GE completed its acquisition of PrimeStar Solar of Arvada, Colo. The purchase price was not disclosed, but is included in the overall $600 million figure, Abate explained in a phone interview from Colorado. GE has held an equity stake in PrimeStar since 2007,  and a majority stake since 2008. The two companies have been working to boost the efficiency of the cad-tel solar panels.

“The biggest challenge for solar is the cost of energy,” Abate said. “For every point you can move [higher] in efficiency, you reduce the cost of the system by 10%.” Thus it’s important news that PrimeStar produced a CdTe thin-film panel with a record high efficiency of 12.8%, a measure of the amount of sunlight hitting the panel that is turned into electricity. Typically efficiencies of such panels are in the 11% range; First Solar has had a goal of reaching 12.5% efficiency by next year.

The attraction of cadmium telluride thin-film solar is its lower cost. It does not use any silicon. First Solar’s production costs are around 80 cents a watt; traditional silicon solar panels are being produced by Chinese manufacturer for about $1.20 a watt.  GE’s Abate wouldn’t  say what the company’s production cost goal will be. He does expect the efficiency of its solar panels to be even higher than 12.8% by the time the factory opens in 2013, noting that as efficiencies increase, systemwide costs drop.

Read the full story on Forbes.com