GE Expands Solar Business as Immelt Seeks to Mirror Wind Growth
General Electric Co., which has become the world’s second-biggest wind turbine maker in less than a decade, is expanding production of two thin-film solar products to increase its renewable-energy business.
GE will work with Japan’s Showa Shell Sekiyu KK’s Solar Frontier unit to make thin-film panels coated with a copper- indium-gallium-selenide compound, or CIGS, according to a statement today. GE’s PrimeStar Solar plant will make cadmium telluride-based thin film panels.
Chief Executive Officer Jeffrey Immelt has spent more than $1 billion on research and development of renewable power since acquiring Enron Corp.’s wind division out of bankruptcy in 2002. GE will offer total solar-system packages, panels, inverters and service contracts.
“We expect to grow faster than the market and we’re going to do it as a technology leader,” Victor Abate, who oversees GE’s renewable-energy businesses, said in an interview, declining to give a revenue target. “This is a big-bet commitment that GE’s making in renewable energy, and the next big phase is solar.”
Global manufacturing capacity in solar panels is set to soar to 30,000 megawatts by 2013 from 10,104 megawatts last year, according to Bloomberg New Energy Finance. GE announced the move as the industry gathers at its biggest conference, Solar Power International, in Los Angeles.
Most solar panels convert sunlight into electricity using silicon-based photovoltaic cells. Thin-film panels are made by coating glass or other material with cadmium telluride or CIGS. They account for about 15 percent of a $28 billion global solar- panel market and have been gaining as prices rise for crystalline silicon, according to Bloomberg New Energy Finance.
The market leader is First Solar Inc., based in Tempe, Arizona, with $2.1 billion in annual revenue and about a six- year head start in commercializing cadmium-telluride thin film. GE also faces start-up competitors such as Abound Solar Inc.
Japan’s Solar Frontier will have the capacity to manufacture 900 megawatts a year, while Arvada, Colorado-based PrimeStar will be able to produce 30 megawatts with plans for expansion, Abate said.
GE waited to boost output until it was convinced it could provide panels with the lowest cost for users, including utilities, Abate said. Expansion probably will be fastest in the U.S., where there’s a small base, and Europe, where solar is heavily subsidized, he said. Fairfield, Connecticut-based GE has lined up at least three customer contracts it plans to disclose by the first quarter, Abate said without divulging names.
The shares rose 23 cents, or 1.4 percent, to $17.19 at 4:15 p.m. in New York Stock Exchange composite trading. That was the highest closing price since May 19.
GE, whose power-generation equipment produces one-third of the world’s electricity, bought Enron’s wind unit for less than $300 million and turned it into a division that’s the biggest in the U.S., with more than $6 billion in annual sales. Its wind equipment, second only to Denmark’s Vestas Wind Systems A/S, generates 21 gigawatts of energy, up from zero before the Enron purchase, Abate said.
This month, GE bought the waste-heat power generation business of closely held Calnetix Inc. to add to its Jenbacher unit, which makes electricity from landfill and biogas sources such as cow manure. Immelt acquired Jenbacher in 2003
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