Abu Dhabi’s Masdar Initiative intends to spend more than $2bn to build a thin-film solar manufacturing subsidiary, building on the growing solar cell market and presenting a drive for industrial gases in the process.

The total investment of over $2bn in Masdar PV is one of the largest single equity commitments made to a solar manufacturing company, and will finance a three-phased manufacturing process, according to the company.

Deutsche Bank estimates the solar market at around $15bn in 2007 and growing at 40% a year, while world-leading industrial gas company The Linde Group noted in its 2007 Annual Report that industry experts expect that from 2012, photovoltaic producers will spend more on gases than flat-screen manufacturers. Furthermore, from 2017 these also appear set to overtake the chip sector and the demand for industrial and specialty gases is increasing.

Ultimately, Masdar hopes to produce 1 gigawatt of annual capacity by 2014 through capacity expansion and the development of thin-film manufacturing facilities around the world. Initially the company will invest $600mn in Masdar PV, which will operate as a holding company based in Abu Dhabi, with manufacturing subsidiaries in different countries. The first, Masdar PV GmbH, has already been set up in Erfurt, Germany.

Another, larger, facility is planned for Abu Dhabi, which will produce an additional 140 MW and is expected to put out its first solar cells by the second quarter of 2010.

Steven Geiger, Head of Special Projects at Masdar, explained how the huge investment will help drive down the costs for solar cells, “This is a materials game. The majority of the cost is the glass and the specialty gases.”

When Masdar PV buys bulk, it gets better deals on the gases and the glass, and can drive down its cost of production, Geiger said.

Masdar, managed by the Abu Dhabi Future Energy Corp, is a multi-billion-dollar investment and development organisation involved in the creation of a zero-carbon emission city, a university focused on clean technology research and development, private equity and venture capital investments in technology, and the development of renewable energy operating companies.