* New factory planned, will employ 400 people
* Lands orders for 100 megawatts of solar products
* Says new panels more efficient than rivals'
* Sees solar as $2 bln-$3 bln business by 2015
(Adds analyst comments, updates shares)
By Scott Malone and Matt Daily
BOSTON/NEW YORK, April 7 General Electric Co
(GE.N) made a big push in solar power, saying it will invest
$600 million to build a new factory as it pursues what it
thinks could be an up to $3 billion business by 2015.
The largest U.S. conglomerate, which over the last decade
has made itself a leader in renewable energy, said it has
designed a thin-film solar panel that converts sunlight to
electricity more efficiently than rival products today.
The move is likely to ramp up already intense price
competition, particularly for First Solar Inc (FSLR.O), which
uses the same thin-film technology as GE has focused on.
"Over time, there is going to be a lot of pricing pressure
and the margins probably will not be what they are today," said
John Segrich, portfolio manager of the Gabelli SRI Green Fund.
"Solar will be a very big market on a megawatt basis, but it's
a question of at what price?"
GE said it is focused on driving prices down.
"The biggest challenge today for the mainstream adoption of
solar is cost, and the way you move cost is efficiency," said
Victor Abate, vice president of GE's renewable energy unit. "We
see ourselves continuing to push that." [ID:nN07108724]
GE, also a leading maker of wind- and natural gas-powered
electric turbines, aims to open by 2013 a U.S. factory in a
yet-to-be-chosen location that will employ 400 and produce
enough solar panels each year to meet the needs of 80,000
The company also landed more than 100 megawatts of orders
for solar thin-film products, which Abate said would generate
"hundreds" of millions of dollars in revenue.
Under Chief Executive Jeff Immelt, GE has been aggressively
building out its renewable energy portfolio, starting with the
wind turbine business, which it entered in 2002 and now
generates about $6 billion in annual sales.
The company has been exploring solar since 2007 and Immelt
told investors in December that he believed it could be a $2
billion to $3 billion business for GE by 2015.
Renewables are just a slice of GE's $37.5 billion energy
unit, which also makes coal-burning power plants and nuclear
reactors, including the design used at Japan's quake-hit
Fukushima power plant that is the site of the world's worst
nuclear crisis since Chernobyl.
SOLAR GROWTH COULD STALL
Global demand for solar panels has grown more than 30
percent annually in recent years, topping 15 gigawatts in 2010
largely due to a boom in business in Germany.
But key European markets are trimming subsidies for solar,
leading some industry experts to worry that growth could stall
just as manufacturers ramp up their capacity.
That could lead to a glut in supplies, pressuring prices
and squeezing profit margins for key companies such as First
Solar, Germany's SolarWorld AG SWVG.DE, China's JA Solar
Holding (JASO.O) and Suntech Power Holdings STP.N.
But the modest size of GE's initial move -- a 400 megawatt
plant would meet just 3 percent of current global demand of 15
gigawatts per year -- may limit the effect GE has on its
"They're going to have a lot of catch-up to do here ...
First Solar's output will be somewhere around 2-1/2 gigawatts
by the end of this year," said Adam Krop, solar analyst with
Ardour Capital Investments in New York. "In terms of scale,
First Solar is still well ahead of them, but obviously GE has
very deep pockets."
FOCUS ON THIN FILMS
GE said it bought the remaining stake in PrimeStar solar,
in which it first took a stake in 2008.
The Fairfield, Connecticut-based company is targeting
large-scale utility solar projects, and plans to highlight its
production of equipment to connect solar panels to the grid.
GE shares were down 1.3 percent at $20.28 on the New York
Stock Exchange. Shares of First Solar were down 2 percent at
$147.57, JA Solar was off 2.6 percent at $6.76 and Suntech was
down 1.3 percent at $9.49 on the Nasdaq.
(Reporting by Scott Malone in Boston and Matt Daily in New
York, additional reporting by Sakthi Prasad and Krishna N Das
in Bangalore; Editing by Maureen Bavdek and Gunna Dickson)