Vietnam has taken yet another step toward generating renewable energy.

Last week, First Solar, Inc., one of the world’s top solar-panel makers, broke ground on a photovoltaic module manufacturing plant in Ho Chi Minh City.

The US$300 million facility is scheduled to begin commercial production in the second half of 2012.

With four manufacturing lines, the plant is expected to produce thin-film solar modules to yield more than 250 megawatts annually. Representatives from the firm say that their manufacturing process can transform a sheet of glass into a complete solar module in less than 2.5 hours.

The factory will play a key role in First Solar’s plan to nearly double its capacity by 2012 and further reduce the cost of solar electricity.

“We look forward to working closely with the Vietnamese authorities in the months and years to come,” said Bruce Sohn, president of First Solar, in a statement. 

The new plant will be the second, of its kind, in Vietnam.

Red Sun Energy, a joint initiative between HCMC and the Rhone-Alpes region of France, opened the country’s first solar panel plant in 2009.

Since then, the firm has been assembling solar panels from solar cells imported from Germany at its factory in the Mekong Delta province of Long An. The panels have a life expectancy of 25 years.

Representatives from Red Sun have also announced plans to manufacture silicon solar cells in Vietnam, easing the dependence on imports.

General director Diep Bao Canh said the solar energy industry in Vietnam enjoyed good growth last year, thanks to growing public interest in alternative energy sources.

The world generated about 16 gigawatts of new solar photovoltaic power in 2010 –double the growth seen a year earlier, Reuters reported in February. Europe dominated new solar power installations, followed by Japan, the US and China.

There is no official data on the total installations of solar panels in Vietnam.

According to Red Sun, many households, especially in the north, are outfitted with solar panels which range in capacity from 500 watts to three kilowatts. In order to mitigate the effects of rolling blackouts in the dry season, some businesses have installed the panels to create a backup power supply of 5-10 kilowatts.

Due to the high concentrations of solar radiation in Vietnam, the nation’s potential for solar power is great. It has been estimated that the solar energy that reaches HCMC every day is equivalent to the electricity output of the entire country over the course of three months.

However, like wind power, the trickiest aspect of the solar market is bringing down retail prices.

First Solar estimated that solar panel prices have halved over

the past ten years and will continue to fall. But until the panels become affordable to most local consumers, solar-panel makers will still have to depend on overseas markets.

Red Sun now charges $6-8 for every watt of solar energy it installs in homes and businesses. A 540-watt solar power system, for instance, retails at around $3,300. That is roughly three times the per capita income of the country. Red Sun said that such systems are mostly being purchased by well-heeled families.