REC is investing S$3.4 billion into the first phase alone. The entire project is expected to cost more than S$6 billion.
The plant will cover one square kilometre and will be one of the biggest solar panel manufacturing plants in the world.
When running at full capacity by 2012, it will have a production capacity of 550 MW worth of cells, 740 MW of wafers and 590 MW of modules. The consolidated revenue is expected to hit S$2.9 billion.
The new facility will complement REC's manufacturing centre in Scandinavia, and will be 10 per cent cheaper to run than any of REC's existing plants.
REC said the decision on investing in the second phase could come as early as next year.