GE to Close Its Only U.S. Solar Panel Factory

By Ucilia Wang

General Electric (GE) plans to close its only U.S. solar panel factory because production costs have exceeded sale prices.

The Fairfield, Conn.-based company told the Dow Jones Clean Technology Insight that silicon panel manufacturing at its facility in Delaware, will stop in January.

GE will shutter the factory altogether by June. The factory can produce 34 megawatts of solar panels per year and employs 82 people. GE plans to layoff the workers with severance packages.

The move reflects the tough times experienced by solar energy equipment makers worldwide as supply far exceeded demand over the past year. Recession and a big reduction in solar subsidies in Spain - once a booming market - are key contributors.

Some manufacturers have seen prices for their products fall by anywhere from 30 percent to 50 percent over the past year.

Some solar company executives say the decline has slowed in recent months as demand picked up, mostly in Europe. But they remain worried about the pace of market recovery.

Last week, Marlboro, Mass.-based Evergreen Solar (ESLR) said it would move panel production from its factory in Devens, Mass., to China next year in order to cut costs.

Earlier this year, BP Solar (BP) announced it would close its solar panel factory in Maryland and outsource that work to a contract manufacturer. BP said back then that it would continue to make silicon ingots, wafers and cells in Maryland.

Last month, BP said it had hired Jabil Circuit to assemble panels at a Jabil factory in Poland.

Comments

[bindlepete]

Sure hard to beat foreign labor costs and shipping back finished goods is cheap and will remain so while North America turns further to being a raw material exporter.

And the recovery is right around the corner---sure. NO jobs- no income- no purchases- no recovery. Just welfare- for a while.

2009 Nov 09 08:19 AM

[PastTense]

"Some manufacturers have seen prices for their products fall by anywhere from 30 percent to 50 percent over the past year."

If these kind of price cuts continue this will make solar much more price competitive with traditional electrical generation--and thus demand will explode.

2009 Nov 09 08:36 AM

[wind4me]

GE is building WIND and is the #2 Wind producer in the world so stick with something U know well, ie WIND
GE is also partnering with (APWR) for China and Asia's largest Gear Box plant in Shenyang China

2009 Nov 09 09:06 AM

[Fred W]

We continue to create a situation where US manufacturing gets killed off...Obama appears to be condoning it--perhaps due to pressure from the Chinese.
We are spiraling down at the same time the market goes up--the bubble is being re-inflated.

2009 Nov 09 10:10 AM

[Swiftcreek1]

Assuming you are correct......hundreds of thousands of new "green jobs" will be created......in China......


On Nov 09 08:36 AM PastTense wrote:

> "Some manufacturers have seen prices for their products fall by anywhere
> from 30 percent to 50 percent over the past year."
>
> If these kind of price cuts continue this will make solar much more
> price competitive with traditional electrical generation--and thus
> demand will explode.

2009 Nov 09 10:27 AM

[jarco]

Simply adds to the notion that GE is slowly but surely becoming an also ran.

2009 Nov 09 10:49 AM

[User 442474]

The US government stimulus in the Green Economy is investing $500 Million on a wind farm in Texas that will create 300 jobs to install, 30 jobs to maintain, and 2000 jobs in China and Europe to build the components.

2009 Nov 09 11:40 AM

[Old Wizard]

This is more evidence that we don't have a comprehensive energy plan and that our administration is not capable of creating one. The loss of production to China and Asia in the field of renewable energy is helped by the environmental, tax and actual stimulus grant policies our Government is pursuing. We refuse to back natural gas-driven transportation and instead force electric cars as a solution. Our cash for clunkers benefitted foreign cars more than ours. Our battery grant money went more to asian suppliers than our own in the final analysis. With over 400 Chinese companies involved in alternate energy activities and with the environmental constraints and wage disadvantages our domestic companies have the result is inevitable. Multi nationals make money no matter where production occurs as long as the selling price is higher than costs and if the dollar declines they make more equivalent dollars selling abroad. GE stock can easily go up as the dollar declines, but those US citizens whose savings are in the bank will have increasingly less purchasing power with those dollars. A kind conclusion one can draw from our government policies is that it is incapable of analyzing the multivariable problems we face in energy, job creation and economic viability. A more critical conclusion might be more accusatory.

2009 Nov 09 12:24 PM

[KJDA2009]

It's easy to understand US companies' motives in moving manufacturing operations to China to cut costs, increase margins, and increase shareholder value.

However, what I believe is not well-understood is the underlying reason why it is so much cheaper to manufacture products - green or otherwise - in China. Cheap labor and virtually non-existent pollution controls certainly play a part, but based on my limited knowledge it seems there are many other contributors as well, including an artificially low exchange rate and extremely generous PRC policies towards subsidizing the construction of factories in mainland China.

I'd love to see an article on Seeking Alpha (or elsewhere) that quantifies how much of China's manufacturing edge is the result of inherent strength as opposed to government policy.

Until then, I personally will continue to believe that China is not playing on a level playing field. The world is not flat!

2009 Nov 09 03:58 PM

[Zenfar]

Just because GE can't do it, doesn't mean it can't be done. ASTI is doing it.

2009 Nov 09 04:32 PM

[DLB40]

Yes let's keep roaring ahead with wind and solar. Do they account for more than 3/4 of 1% of our energy production yet? Will they get to 3% in ten years. I doubt it.
Come on people......Get real!! the ChiComs are drilling 90 miles from Florida in Cuban waters, and have also secured all of the Canadian Oil that is being developed. They're locking up control of oil resources all over the world. The Russians are roaring ahead and are now or will soon be the #1 oil producer in the world. What in the world con possibly cause any of you to talk about the wind solar gibberish when we're rapidly becoming a has-been 3rd world power who will be 20 Trillion Dollars in debt in 10 years?

2009 Nov 09 05:59 PM

[rooferguy]

Let’s get real about the jobs creation capacity of domestic solar panel manufacturing.

The article says that GE’s factory produced 34 megawatts of panels with 82 people. The entire U.S. demand for solar panels is about 400 MW in 2009 — that would employ 965 people TOTAL in the U.S. With production line automation, the trend is towards fewer jobs per megawatt.

At the same time there are about 10,000 people in the U.S. involved with marketing, selling, installing and operating solar power systems, and this number of people is growing very rapidly as the prices go down.

Take a look at the Country of Origin label on the computer you’re reading this on. It probably says “China.” So what? Be glad you can do your job (or your stock trading) more efficiently because you can do it on a cheap, high performance computer.

Availability of cheap solar panels — regardless of where they are made — is creating a very large installation industry, is saving a tremendous amount of energy by reducing electric bills, and freeing up consumer spending for other things.

The jobs are on the installation side, with more jobs as prices go down. These installation jobs can NEVER be outsourced. The sad fact is that subsidizing or requiring domestic manufacturing results in net FEWER jobs in the solar industry.

2009 Nov 09 06:56 PM

[KJDA2009]

Rooferguy,

I wholeheartedly supprt the development of a strong PV installation market in the US. However, while I generally agree with the premise that "cheaper is better", I think it is a mistake to suggest that we Americans blindly follow this mantra in the case of PV.

First, it's possible that the extremely generous subsidies offered by the Chinese government to drive domestic PV panel manufacturing and export could be unsustainable in the long run. This would have the same negative impact on the PV industry that the 2008 Spanish market collapse did, except on the supply side rather than the demand side.

Second, from an environmental perspective it is still unclear whether the production of cheap PV panels in China is actually good or bad for the planet. China is a virtual wild west when it comes to pollution control - see www.washingtonpost.com... and www.chinahush.com/2009.../ for some examples. While this sort of unchecked pollution & waste generation may be acceptable in computer manufacturing, in a supposedly "green" industry like PV I would argue it is not.

Thirdly, there is the matter of energy security. While our ties with China are currently in good shape, it is unsettling to think that PV could become America's next foreign energy addiction.

Luckily, I think that with the right US government incentives - chosen to subsidize domestic PV manufacturing in the short term, so that the grid parity point can be reached gradually & without creating a bubble - we can create both a strong installation sector and a strong PV manufacturing base here in the US. Unfortunately, though, with the stimulus money and legislation we've seen thus far, it seems that a return to domestic manufacturing is not the main priority of the Obama administration. Let's hope this changes in 2010.

On Nov 09 06:56 PM rooferguy wrote:

> Let’s get real about the jobs creation capacity of domestic solar
> panel manufacturing.
>
> The article says that GE’s factory produced 34 megawatts of panels
> with 82 people. The entire U.S. demand for solar panels is about
> 400 MW in 2009 — that would employ 965 people TOTAL in the U.S. With
> production line automation, the trend is towards fewer jobs per megawatt.
>
>
> At the same time there are about 10,000 people in the U.S. involved
> with marketing, selling, installing and operating solar power systems,
> and this number of people is growing very rapidly as the prices go
> down.
>
> Take a look at the Country of Origin label on the computer you’re
> reading this on. It probably says “China.” So what? Be glad you can
> do your job (or your stock trading) more efficiently because you
> can do it on a cheap, high performance computer.
>
> Availability of cheap solar panels — regardless of where they are
> made — is creating a very large installation industry, is saving
> a tremendous amount of energy by reducing electric bills, and freeing
> up consumer spending for other things.
>
> The jobs are on the installation side, with more jobs as prices go
> down. These installation jobs can NEVER be outsourced. The sad fact
> is that subsidizing or requiring domestic manufacturing results in
> net FEWER jobs in the solar industry.

2009 Nov 10 12:11 AM

[Who's Your Mac Daddy?]

ROOFER GUY believes we shouldn't worry about America's solar panels not being manufactured in the US because all the "installation jobs can NEVER be outsourced."

HOOEY! Most of these jobs will go to illegal aliens who (if necessary) will work all day in the hot sun for half the prevailing wage.

2009 Nov 10 03:50 AM

[aussiereader4]

you can blame this state of affairs on 'head in the sand' 'George dubya' . If you had embraced climate change 10 years ago as the experts told you, you may have had a viable auto industry and a solar manufacturing base. Instead you got a climate skeptic and little green manufacturing base.

On Nov 09 12:24 PM Old Wizard wrote:

> This is more evidence that we don't have a comprehensive energy plan
> and that our administration is not capable of creating one. The loss
> of production to China and Asia in the field of renewable energy
> is helped by the environmental, tax and actual stimulus grant policies
> our Government is pursuing. We refuse to back natural gas-driven
> transportation and instead force electric cars as a solution. Our
> cash for clunkers benefitted foreign cars more than ours. Our battery
> grant money went more to asian suppliers than our own in the final
> analysis. With over 400 Chinese companies involved in alternate energy
> activities and with the environmental constraints and wage disadvantages
> our domestic companies have the result is inevitable. Multi nationals
> make money no matter where production occurs as long as the selling
> price is higher than costs and if the dollar declines they make more
> equivalent dollars selling abroad. GE stock can easily go up as the
> dollar declines, but those US citizens whose savings are in the bank
> will have increasingly less purchasing power with those dollars.
> A kind conclusion one can draw from our government policies is that
> it is incapable of analyzing the multivariable problems we face in
> energy, job creation and economic viability. A more critical conclusion
> might be more accusatory.

2009 Nov 10 04:42 AM

[bottoms-up]

Didn't I read something on SA last week that "solar was a great place to be"?

I guess it's the place to be, but not in the USA.

Actually, I think GE should keep the solar panel factor and close down CNBC.

2009 Nov 10 09:36 AM

[jse17]

Yes, eliminating Immelt et al’s salary and benefit package is an excellent modality for GE corporate cost and waste reduction. Of course this option is “out of the question!”


On Nov 09 04:32 PM Zenfar wrote:

> Just because GE can't do it, doesn't mean it can't be done. ASTI
> is doing it.

2009 Nov 10 12:37 PM

[Edward, Lord Clarendon]

"Say it ain't so, Joe," Biden!

Wassamattah? You fools in DC already run out of stimulus money? Can't save jobs in your own state.

Fool some of the people all of the time.

2009 Nov 10 12:50 PM

[Old Wizard]

The split betwen manufacturing and installation jobs is really not the essence of the problem. We have heard that we need to drive for energy independence. This is of vital interest to the well being of our country. Let's look at the trends. Lithium ,the essential material in electric car batteries of the future ,is not a material that we have in abundant supply, China does. The leaders in the current crop of lithium batteries are in China, S. Korea and Japan. These batteries are not yet up to powering electric cars of sedan size very far, but the Chinese manufacturer of lithium batteries has announced their intention to build electric cars. Would they have a labor cost and environmental restriction advantage? Now let's contrast that with natural gas-driven cars. We have it in abundant supply, the chinese do not. Further, instant job creation would occur in the conversion of gasoline powered vehicles and the extension of the existing 2.5 million miles of our domestic pipelines. The drive toward alternate energy should be put in high gear and the borrowed stimulus money put to use to subsidize both component manufacture and the installation of transmission lines. A goal to provide 20% of the electrical energy for 10 of our largest cities in ten years should be established like going to the moon in ten years. The gov should move to remove all legal and stalling barriers by use of emminent domain if necessary. Copenhagen gets 20% of its electrical energy from some 26 windmills situated on the very beautiful approach to their harbor and Iran is converting their automobiles to natural gas as a strategic priority. We buckshot our borrowed stimulus money to a bunch of make work and insufficiently thought out activities. The electric battery grant is a case in point where more than half of the 2.5b went off shore, even though it was awarded for the most part to domestic companies. We subsidized GM, forced them to build Phev's in the future, but the volt batteries and probably the subsequent models will be bought from China or S.Korea. Currently electric power in the US that is generated from wind and solar is less than .4 of 1%. Doubling it in 3 years is trivial and doing so every 3 years means that we will bearly get to 15% of todays needs in 15 years at which time we will have at least 10% more people and will need that more energy. The gov. postures that global warming is the big harbinger of doom but nothing that we are doing is destined to really reduce co2 appreciably, but almost everything we are doing is making us less secure and creating a downward economic spiral. At the same time we want to completely ignore the fact that the average measured temperature of the earth has decreased over the last 5 years and is now roughly the same as 1999. Our economic demise will destroy us well before the climate change boogeyman, if we don't get about solving emminent problems. I believe in the two bullet theory: If the first bullet is aimed at your head and you don't duck, it doesn't matter where the second one goes.

2009 Nov 10 03:30 PM

[Freya]

There you go with your Lithium this and that:

"Let's look at the trends. Lithium ,the essential material in electric car batteries of the future ,is not a material that we have in abundant supply, China does."

Lets take a Look at the Real Trends, The energizer Bunny is running around on Lithium Batteries.

Do you know something the Bunny doesn't?

2009 Nov 10 05:08 PM