OM in the News: GE’s Move to Solar Power

As global demand for solar panels and power continues to explode (from 2 gigawatts in 2007 to 15 gigawatts this year to 75 gigawatts forecast in 2016), GE has just announced that it plans to open the largest solar panel factory in the US in 2013. The company wants its solar energy business to match its $6 billion wind-turbine unit.

Today’s Wall Street Journal (April 8,2011) reports that the new plant will employ 400 people and produce thin-film solar panels sufficient to generate 400 megawatts of electricity annually. This is enough to power 80,000 homes a year. SolarWorld AG (of Germany) currently operates the biggest solar-panel plant in the US (in Oregon) and generates 350 megawatts.

GEs investment of $600 million in solar technology adds to its $3.2 billion deal to buy Converteam, a French power-conversion company. Converteam complements GEs solar effort by converting sunlight into grid-ready electricity. GE says it already has 100 megawatts for its thin-film technology on order.

The move is not only good news for the economy, but means the US will be fighting hard to keep from losing this vast market to China’s government-subsidized solar industry (see our earlier blog on the topic).

Discussion questions:

1. How will GE be able to compete successfully with low-cost Chinese firms?

2. Why is GE entering this market?

3. Why is sustainability an important OM topic (see Ch. 7)?