Thursday, April 7, 2011

GE (GE) Challenges (FSLR), Building Huge Solar Factory in U.S. - Yawn

General Electric (NYSE:GE) announced today it has plan in place to build the largest solar panel manufacturing plant in the U.S. which would be a direct challenge to First Solar (NASDAQ:FSLR), which makes the same solar panels that GE will be manufacturing.

Although it may be more hope and hype than reality, General Electric claims demand for solar products will increase over the next five years by 75 gigawatts. That's at a time when demand is falling in Europe and North America, among other regions.

Orders from customers in the U.S. from GE are as about 100 megawatts at this time.

Victor Abate, vice president of GE’s renewable energy business, said in a press release, “Over the last decade, through technology investment, GE has become one of the world’s major wind turbine manufacturers, and our investment in high-tech solar products will help us continue to grow our position in the renewable energy industry.”

“The biggest challenge for solar is the cost of energy,” Abate said. “For every point you can move [higher] in efficiency, you reduce the cost of the system by 10%.”

General Electric's decision to fully enter into the renewable industry business is extremely dubious as to profitability, as wind turbines are another industry that is under pressure as it has reached levels where there isn't much more growth opportunities beyond its existing base of customers.

General Electric was trading at $20.25. falling $0.30, or 1.46 percent, as of 1:31 PM EDT.

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