Solar cell investment seen matching chip sector

ZURICH (Reuters) - Global investments in solar cell production will match those flowing into semiconductor making by 2010, technology researcher iSuppli said on Tuesday.

Production of photovoltaic solar cells is expected to rise to about 12 gigawatts (GW) by 2010 from 3.5 GW last year, requiring heavy investment, iSuppli said.

"Each photovoltaic factory will require an investment of $500 million and more ... and will generate annual revenue of $1 billion per year or more, putting them into the size, cost and employment range of semiconductor fabs," the researcher said.

Germany's Q-Cells overtook Japan's Sharp Corp last year as the world's largest solar cell maker. Other big players include China's Suntech Power Holdings and Norway's Renewable Energy Corporation.

High energy prices will drive demand for renewable energy in the short term, while over the next 50 years the world will need three to four times more electrical power to support continued growth in population and economic output, iSuppli said.

An increasing amount is expected to come from green energy.

Demand will get another boost when the cost of solar electricity comes into line with the power from the grid, the researcher said, adding that Q-Cells and REC expect a reduction in solar system costs by 40 percent from 2006 to 2010.

It said it expects the so-called grid parity can be reached by 2012 in countries with constant sunshine and by 2018 in areas with adequate or medium sun exposure.

(Reporting by Eva Kuehnen; Editing by David Holmes)