The nation’s largest conglomerate – General Electric – is getting into the solar business in a big way with the firm’s announcement that it is investing $600 million to build a new solar-panel manufacturing plant as it pursues what it thinks could be a $3 billion business by 2015.  The firm, already a leader in renewable energy, has designed a thin-film solar panel that converts sunlight to electricity more efficiently than any other product currently on the market.  The firm, a leading manufacturer of wind- and natural gas-powered electric turbines, plans to open a factory in an as-yet unknown location by 2013.  The facility will employ 400 workers and produce enough solar panels annually to power 80,000 homes.

“The biggest challenge today for the mainstream adoption of solar is cost, and the way you move cost is efficiency,” said Victor Abate, vice president of GE’s renewable energy unit.  “We see ourselves continuing to push that and continuing to move efficiency and as a result the costs of solar continue to come down.”  According to Abate, a decision on where to locate the factory will be made within the next three months.  The decision will be based on criteria including proximity to GE’s research centers, available space, and state and local government incentives, Abate said.  GE expects to make a decision before the end of the year at the latest.

GE’s entry into the solar business comes at an excellent time.  Solar panel installations are expected to surge in the next two years as the cost of generating electricity from the sun approaches that of coal-fueled plants. Large photovoltaic projects would cost $1.45 a watt to build by 2020, half the current price, according to Bloomberg New Energy Finance estimates.  Solar is feasible against fossil fuels on the electric grid in sunny regions such as the Middle East.  “We are already in this phase change and are close to grid parity,” said Canadian Solar chief executive Shawn Qu.  “In many markets, solar is already competitive with peak electricity prices, such as in California and Japan.”

Solar photovoltaic system installation has the potential to nearly double to 32.6 gigawatts by 2013 from 18.6GW last year, according to New Energy Finance.  Manufacturing capacity worldwide has quadrupled since 2008 to 27.5GW annually; 12GW of production will be added in 2011.  Canadian Solar had about 1.3GW of capacity and is expected to reach 2GW in 2012, Qu said.

Writing in Time’s “Ecocentric” column, Bryan Walsh says that the new plant is “Good news for solar advocates and bad news for competitors — General Electric is ready to break into the solar cell business in a major way.  The $218 billion company announced today that it had built a solar module with the highest-ever efficiency rate for cadmium-telluride thin film — the most popular low-cost solar technology — at 12.8 percent, according to independent testers at the National Renewable Energy Laboratory.  That announcement came as GE told reporters that it intends to manufacture those solar modules at a 400-MW factory — in what would be the biggest such facility in the U.S. — that is set to open in 2013.  GE also completed the acquisition of PrimeStar Solar, the Colorado-based thin-film manufacturer, which will complement its recent acquisition of the power conversion company Converteam.”