General Electric has committed to building the biggest solar PV manufacturing plant in the US, outlining plans to become the dominant player in the US solar market and take on the Chinese at the their own game – to build cheaper and more efficient panels.

GE, which is the biggest industrial company in the world, and the largest supplier of energy equipment, says it will build a 400MW capacity manufacturing plant in Colorado. It will produce thin-film panels, where US companies believe they have a competitive advantage over the Chinese silicon-based manufacturers, and estimates that its panels will have an efficiency rating of 14 per cent when the panels first roll out in 2013, well ahead of the 11.7 per cent recently produced by market leader First Solar.

The decision by GE to commit to thin-film PV, and a US manufacturing base, follows a decade-long study on the solar market and tracking and modeling every technology option. “We didn’t get into thin film by shooting a dart on the board,” Victor Abate, the vice president of renewable energy at GE, told Forbes in an interview.
“What we’ve done is over the past decade at our global research center is that we’ve tracked every technology. You got to have a better product and be technologically advanced. It’s going to be a dynamic industry.”

Indeed, GE is confident that the take-up of solar will be irresistible once it becomes cheaper for householders to have solar rather than take energy from the grid. Mark Little, the global research director for GE, said solar would be cheaper than retail prices in many areas within three to five years (in places like Hawaii it already is). If that’s the case, “you’re going to have a lot of people that are going to want to have solar at home,” Little said in April.

The commitment by GE to the Colorado plant represents a significant change of dynamics in the US solar market. It appears to be competing directly with First Solar for dominance of thin-film market. First Solar, which makes panels at around 75c/watt and aims to lower that by a third in coming years, says it expects the yield on its panels to be 13.5 per cent to 14.5 per cent in 2014, and says it is working on technology that could lift efficiency to 15.3 per cent.

And since GE first canvassed its entry into the solar market, several start-ups have fallen by the wayside – most controversially Solyndra, which failed last month taking a $535 million federal loan with it; and also Stirling Energy Systems. GE, however, has the deepest pockets of any company. There is even talk that First Solar, whose share price has slumped sharply in the past year, along with other solar companies, could become a takeover target. (Interestingly, First Solar and GE are working together on Australia’s first utility-scale PV project in WA).

Abate told Forbes that the overwhelming factor is new technologies was cost. “When we entered wind in 2002 the cost of wind was much higher than it was today,” he said. GE is now one of the big three wind turbine manufacturers in the world, with a 10 per cent market share and a $6 billion a year business.

“The more competitive you make solar, the bigger it will be,” Abate said. The difference this time round, however, is that while China entered the wind market after GE, and supported it with billions of dollars of cheap loans, land and other support, China already has more than half of the world’s solar panel market.

The announcement came as the US Republicans and Rupert Murdoch’s News Corp maintained their extraordinary attack on solar companies and the department of Energy loan guarantee program following the collapse of Solyndra. The Republicans have sought to use Solyndra as an example of mismanagement by the Obama administration, and of the folly of investing in new technologies, and not just oil and gas, as leading presidential candidate Rick Perry outlined on Friday.

Fox News has now turned its attention on another DOE loan recipient SunPower, and the US web site Media Matters on Friday documented last Friday the relentless attacks last week where six different Fox “current affairs” programs alleged not only was the loan being used to build a plant and create jobs in Mexico (it’s not, the plant is being built in California), but the company was also likely to go bankrupt. US analysts said the chances of that appear to be close to zero.

You can see the attack here, but here’s a small taste. Stephen Doocy on Fox & Friends: "Another failing solar company, and another federal loan, but this one? Not even in the United States of America." And then this on the O’Reilly Factor: Bill O'Reilley: “They didn't go bankrupt yet, right?” Elizabeth MacDonald, Fox Business: “That's correct.” O'Reilly: “But they may!” This and other Fox reports claimed the $1.2 billion loan was being used to create just 15 Mexican jobs. Actually, it will create 350 jobs in the US. “Fair and balanced,” as they say.

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