GE Suspends Solar Factory Plans as Rivals Struggle
First Published Tuesday, 10th July 2012 12:15 am - © 2012 Dow Jones
General Electric Co. (GE) has stopped construction of a solar-panel factory in Colorado in the latest sign of the U.S. solar manufacturing industry's decline.
GE initially planned to make thin-film solar panels at a factory in Aurora, Colo., using a cadmium telluride technology developed by PrimeStar, which GE acquired in 2011. GE planned to use the panels in solar farms that it would develop, or sell them to other developers.
GE now plans to continue its solar power-plant development business, but the company has put the solar-panel factory on hold, said Lindsay Theile, a GE spokeswoman. Ms. Theile cited steep price declines and a global oversupply of panels as factors in GE's change of plan.
Plunging solar-panel prices amid an influx of cheap Chinese panels and a global oversupply of solar manufacturing capacity have driven smaller solar firms out of business, while larger companies have struggled against falling profits and stock prices. The difficulties prompted SolarWorld AG's (SWV.XE) U.S. unit and other U.S. firms to file a trade case against Chinese rivals. The competition and lower prices have benefited developers and investors in solar projects, which are eligible for federal tax credits and other incentives.
The U.S. Department of Commerce has slapped preliminary antidumping duties of 31% to 250% on panels made with Chinese solar cells. While that case has been pending, U.S. solar-panel makers have continued to struggle.
Solar-panel maker Abound Solar, of Colorado, filed for Chapter 7 bankruptcy protection last week after taking more than $68 million in federal loans to expand manufacturing. California solar-panel maker Solyndra LLC filed for bankruptcy last September after accepting more than $500 million in federal loans, triggering criticism of the Obama administration's clean-energy policies.
Other companies have decided to curtail production or stop making solar panels. U.S. solar-power giant First Solar Inc. (FSLR) said earlier this year it would shut its German factory by the end of the year, cut 2,000 jobs and halt work on a new factory it had planned to open in Arizona. First Solar, which also builds solar farms, has seen its market capitalization fall by more than 85% to $1.26 billion.
In June, Germany-based glass maker Schott Glas AG said it would stop making solar panels at its Albuquerque factory as part of a larger effort to end production of solar panels made with silicon.
Developing and owning solar-power projects have been more lucrative than making the panels, thanks to federal subsidies and state renewable-energy requirements.
The MidAmerican Energy Holdings unit of Warren Buffett's Berkshire Hathaway Inc. (BRKA, BRKB) started a renewable-energy company earlier this year after it bought a large California solar farm from First Solar. Other power companies, such as NextEra Energy Inc. (NEE) and NRG Energy Inc. (NRG) also own solar farms.
In January, GE said it would provide the solar equipment for a 23-megawatt solar farm in Illinois being built by Invenergy. The solar panels are being supplied by Showa Shell Sekiyu's (5002.TO) Solar Frontier unit. GE also is supplying the inverters and racking equipment.
Although GE is putting its Colorado solar-panel factory on hold for at least 18 months, company researchers will continue working to improve the company's thin-film technology, Ms. Theile said.
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