Masdar, an Abu Dhabi-based clean-technology initiative, said on Wednesday that it will invest $2 billion to manufacture thin-film solar cells.
The money will significantly boost global solar cell production, potentially bringing prices down. It's also a major bet on thin-film solar cells, which use less material than traditional silicon.
Analysts expect thin-film cells, made from a variety of materials, to become a significant portion of solar cell manufacturing and ratchet up competition on incumbent suppliers.
The Masdar Initiative, which is building a "green city" in Abu Dhabi, said in a release that an initial $600 million will go to building a solar plant in Germany that will be online in the third quarter of next year.
Further investments will go to a solar plant in Abu Dhabi, set to be operating in 2010. The two plants, which will be run by an entity called Masdar PV, will be able to produce 210 megawatts annually, which will go to Europe and Abu Dhabi.
Masdar did not indicate which company will supply the solar manufacturing equipment. Forbes speculated that the likely supplier is Applied Materials.
The Masdar Initiative is investing billions in dollars to diversify Abu Dhabi's energy holdings away from oil. Its goal is to create a world-class research and development center in clean energy and to make one gigawatt of electricity from renewable sources by 2014.
Update May 30: Applied Materials on Friday confirmed that it is supplying 210 megawatts of solar cell manufacturing equipment to Masdar PV.