NEW YORK, July 27 (Reuters) – Citing recent success in alternative power, GE Energy, a subsidiary of General Electric Co. (NYSE:GE – News; NYSE:GE – News) is hoping to boost its solar energy sales to $1 billion annually by the end of the decade, the head of GEs solar business said.
In 2002, GE Energy bought assets of bankrupt Enrons (Other OTC:ENRNQ.PK – News) wind turbine business for under $200 million and then doubled sales to $1.3 billion.
This year, GE bought Delaware-based Astropower, once a solar power leader, for about $19 million. Astropower went bankrupt after failing to file several financial reports with the government last year.
Ali Iz, who heads GE Energys solar business, said recent growth in demand of solar equipment that is tied to the national electricity grid, over traditional units designed for remote areas that are far from the grid, could play a big role in boosting the companys production.
"We certainly hope that solar will be a billion dollar-plus business for us," Iz said in a telephone interview. He said that amount of sales could be seen per year by the end of the decade.
Worldwide, solar is a $7 billion per year business, according to industry groups.
Iz said GE Energy is adding about 20 contractors for production operations at its plant in Delaware formerly owned by Astropower for at least six months.
"This is in response to a significant increase in demand in the industry. Its across the board worldwide, driven mainly by Germany," said Iz.
He said solar demand in Japan and Germany has been fuelled by production-based incentive programs in which utilities are required to pay a premium for power generated by renewable energy. Demand has been driven to a lesser extent in the United States, where many states have rebate-based incentives for residential and commercial solar systems.
"Incentive programs are there to encourage the industry to invest in research and development," said Iz. "Its an interim measure, as long as incentives are consistent and reliable, companies will invest, and eventually, over a number of years, the industry should be able to stand on its own.
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