GE appears to be shying away from newer thin-film solar technology based on semiconductors made of copper, indium, gallium, and selenium (CIGS). Merfeld says that it is uncertain how well that material can perform at the larger sizes and volumes needed for commercial solar panels. Cadmium telluride is a simpler material that's much easier to work with than CIGS, which makes it easier to achieve useful efficiencies in mass-produced solar panels.

Merfeld says GE hopes to compete with First Solar by offering higher performance solar cells and reducing the overall cost of solar power. In addition, its name recognition could encourage installers to buy its panels and could help secure financing of solar projects from banks. GE also has extensive distribution networks, especially for new construction, says Travis Bradford, president of the Prometheus Institute for Sustainable Development, a consultancy in Chicago.

Yet challenges remain. Tellurium is a rare material, so to keep its costs down, it will be important for GE to secure large supplies of tellurium rather than buying it on the open market, Jaffe says. He says having another large manufacturer of tellurium-based solar panels may make it necessary to discover new sources of the element.

What's more, First Solar has a large lead on GE in terms of its experience manufacturing cadmium telluride and finding ways to bring down prices. It could be challenging to even get close to First Solar's costs. "If GE wants to get into photovoltaics, the crystalline silicon boat already sailed," Bradford says. "The problem is that the thin-film boat may have as well, particularly for cadmium telluride."