One of the biggest solar panel factories in Europe has been launched in Italy as a U.N. report says photovoltaic modules have become more price-competitive.

Ceremonies were Friday in Catania on Sicily, to inaugurate a $511 million PV module plant, which its owners say will be capable of producing 160 megawatts in electric generating capacity per year via small-scale solar and rooftop solar systems.

The factory is being built by 3Sun -- a joint effort by the Italian renewable energy company Enel Green Power, Sharp Corp. of Japan and Switzerland's STMicroelectronics.

The companies used $70 million in regional investment aid from the Italian Joint Ministerial Committee for Economic Planning as well as $100 million in capital from each of the three firms and financing from three major banks -- Banca IMI, Centrobanca and Unicredit.

The plant's inauguration was a big event for Sicily. Raffaele Lombardo, president of the Sicily region, and Giuseppe Castiglione, president of Catania province, were on hand for the new factory's unveiling.

Planning for the plant started in July 2010 and 3Sun aims to complete it by the end of 2012, the European Commission says.

The building was constructed by STMicroelectronics to fabricate electronic wafers and has been redesigned to make photovoltaic panels after sitting idle for several years, the electronics industry trade journal EE Times reported.

3Sun is planning initial employment of 280 workers at the plant.

Its PV modules are being targeted at solar power markets in Europe, the Middle East and Africa. A second joint venture called ESSE, short for Enel Green Power and Sharp Solar Energy, will use the modules in small-scale photovoltaic systems built and operated by the partners, who say they are aiming to deploy more than 500 megawatts by 2016.

3Sun's first customer will be itself. The company said it will install a 1-megawatt photovoltaic plant on the rooftop of its own new factory.

The announcement came only a day after the U.N. Environment Program predicted the small-scale solar market is likely to stay strong in 2011.

UNEP's latest annual report on renewable energy investment trends noted that the price of PV modules per megawatt had fallen 60 percent since mid-2008, making solar power far more competitive with other forms of energy in sunny countries.

The agency singled out the rooftop solar panel in industry in Europe as one of the main reasons there was a 32 percent jump in green energy investments worldwide in last year.

There was also a big increase in spending for government research and development in the field. Well more than $5 billion was poured into renewable energy research and development in 2010 -- a 120 percent increase over the previous year.

"The continuing growth in this core segment of the green economy is not happening by chance," said UNEP Executive Director Achim Steiner. "The combination of government target-setting, policy support and stimulus funds is underpinning the renewable industry's rise and bringing the much needed transformation of our global energy system within reach."

The growth in the rooftop solar industry and other small-scale projects more than made up for a drop of 22 percent ($35.2 billion) in European large-scale renewable energy investments, the UNEP report noted.

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