SAN FRANCISCO — In a move that could reshape the American solar industry, General Electric is announcing that it will build the nation’s largest photovoltaic panel factory, with the goal of becoming a major player in the market.

Posted by Staff

“For the past five years, we’ve been investing extremely heavily in solar,” said Victor Abate, vice president for G.E.’s renewable energy business. “Going to scale is the next move.”

G.E.’s connections to Colorado may bode well for locating the panel factory in Wyoming’s neighboring state. It acquired Arvada-based PrimeStar Solar Inc. a maker of thin film solar panels located in a suburb of Denver, which the National Renewable Energy Lab in Golden has certified — at 12.8 percent efficiency — as the most energy efficient of its kind.

G.E. says the new factory will employ 400 workers, create 600 related jobs, and produce solar panels that would generate 400 megawatts of energy on an annual basis.

The factory will manufacture thin-film photovoltaic panels made of cadmium telluride in 2013.  These type of panels are less efficient than conventional units, but offer the advantage of being produced at a lower cost, and are increasingly popular with utility scale solar developments.

The announcement from G.E. is yet another signal that the manufacturing giant is serious about increasing its energy business portfolio, with major stakes in nuclear power plants and natural gas turbines. Recent expansion has been primarily through acquisitions.

“We believe we’ll be a cost leader, a technology leader and we’re excited about our position in a 75-gigawatt solar market over next five years,” said Abate.

How G.E.’s move into PV manufacturing will impact other players in the very competitive sector is yet to play out, but it is sure to cause rumblings at Arizona-based First Solar, the current thin-film market leader. Colorado-based Abound Solar, another competitor in the sector, is adding manufacturing capacity, this year and next, for its line of cadmium telluride panels. The company recently closed on a $400 million federal loan guarantee to fund that the expansion.

G.E. said it will not apply for federal loan guarantees, but instead explore options for state and federal manufacturing tax credits

While the initial manufacturing roll-out will be small compared to First Solar’s level of production, G.E.’s Abate likened his company’s solar effort to the rise of its wind energy business.

Speaking to the New York Times, he said “It’s a $6 billion platform and it was a couple of hundred million dollars in ’02,” referring to the company’s wind division. “When you look at G.E., we’re very good at scale. In ’05, we were building 10 turbines a week. By ’08, we were doing 13 a day.”

The biggest competition G.E. will face will be from low-cost, government-subsidized Chinese manufacturers, something it already deals with in the wind business.