GE lays off 85 at solar panel plant

General Electric Co. has laid off about 30 percent of its work force and cut two shifts at a solar panel facility in Newark, the result of a slowdown in the market for solar power.

About 85 workers were let go as the plant cut production to a single shift, said Tom Rumsey, a spokesman for GE Energy. He said the facility now employs about 200.

Rumsey said orders have been falling and inventory piling up as potential customers struggle to find financing for photovoltaic installations, which convert sunlight to electricity.

"It's unfortunate, but we have to align our manufacturing output with the demand that we have," Rumsey said.

The credit crunch has slammed the brakes on the solar industry after several years of rapid growth, as fewer banks are willing to finance large solar arrays. GE's production cuts are part of an industrywide trend, with several large solar-panel makers announcing layoffs in recent months.

"There's clearly an oversupply right now, and it's because solar growth is not as pronounced as it was a year ago," said Jesse Pichel, a senior research analyst for Piper Jaffray & Co. who covers the renewable energy industry.

Pichel said the solar industry is expected to post "incredibly weak" results in the first half of 2009, but should begin to recover in the second half as U.S. and Chinese stimulus packages encourage growth in the market. He expects the solar industry to grow at least 50 percent in 2010.

But Pichel said the cost disadvantages of making solar components in the United States are becoming pronounced, and he believes more companies will outsource production to China.

"We believe that the installation of solar panels and the supporting infrastructure ... will create more jobs than the actual production of the panels themselves, and are certainly better jobs for American workers," Pichel said.

GE Energy, a business unit of the industrial giant, began operating in Delaware in 2004 after buying the assets of AstroPower Inc. out of bankruptcy. GE has received more than $1.8 million in state grants since the acquisition.

AstroPower, a pioneering solar company founded in 1983 by a University of Delaware professor, employed more than 600 workers at its peak.

Renewable energy is about a $6 billion business for GE, with wind power accounting for the majority of the sales, Rumsey said. He did not disclose sales of solar products but said they were a "small fraction" of total renewable energy sales. Rumsey said GE continues to invest in technologies that will help make solar power cost-competitive with other sources of energy.

"We're still very bullish on solar," he said.

But GE, which is a leader in traditional energy services and wind turbines, "has not stepped up" in the solar industry, Pichel said. He said GE's strategy for the sector is unclear.

"It has lagged in solar and is not a top 10 supplier," Pichel said. "It's curious why GE has not become a bigger factor."

http://www.delawareonline.com/article/20090408/BUSINESS/904080334