GE Stalls Solar Factory Construction

Add another solar factory to the list of closures and delays that have been plaguing the industry. Solar startups, including Solyndra and Abound Solar, a recipient of government funds that declared bankruptcy last week, have been failing left and right in the face of low solar panel prices. Now GE has reportedly stopped work on its planned 400-megawatt solar panel factory in Colorado. It says it needs to improve the power output of its technology if it’s to compete.

Many of the companies that are failing had bet that thin-film solar panels that are less efficient (and so produce less power) than conventional silicon-based ones could break into the market by being less expensive to manufacture. It was a prospect given credence by the dazzling success of First Solar, a U.S.-based thin-film solar manufacturer that became the world’s largest solar panel maker at a time when silicon prices were particularly high. But prices for conventional silicon panels fell faster than these startups could drive down their manufacturing costs.

It was thought that a company like GE, with its deep pockets, might be able to scale up production to the point that its thin-film solar panels could compete with silicon. The reports throw this into doubt. It might be that both low cost and at least comparable efficiency levels are needed to compete.

A better strategy for startups may be finding ways to inexpensively manufacture solar cells that are far more efficient than conventional silicon ones. Since the cells are more powerful, fewer are needed and installation is cheaper (per watt), which could give such companies a competitive advantage.