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Thin-film solar panel maker Nanosolar isn’t shy about tooting its own horn. The heavily-funded startup has made a series of advances over the past couple years, from building one of the world’s largest solar cell factories to printing its first cells, all the while claiming that it has the best technology around.

Well, maybe the claims are true. CEO Martin Rosencheisen today unveiled a new tool made by the company, an ultra-fast solar cell printer (video below), that he tells me will create “a new regime of capital efficiency in the solar industry”, leaving competitors in the dust.

Most thin-film startups, including Nanosolar, use a material called CIGS to convert sunlight into electricity (regular cells use various forms of silicon). In theory, you just need to put a CIGS layer atop a substrate like a plastic sheet to start generating energy. In practice, making cells that are both uniformly efficient and cheap has been a challenge for CIGS startups.

What Nanosolar has now, it says, is a $1.65 million printing tool that can churn out one gigawatt of cells each year, running out up to 2000 feet of material each minute (the average speed is 100 feet per minute). Rather than stuttering as it speeds up, Rosencheisen says the printer is more effective at higher speeds, producing cells of up to 14 percent efficiency, which blows a recent record HelioVolt laid claim to, of 12.2 percent efficiency, out of the water.

Putting all that in perspective, most thin-film startups are contemplating initial production lines of under 100 megawatts, with cells running from 6 to 12 percent efficiency. Nanosolar is claiming jaw-dropping figures for a single production line — and at the equipment price, bargain-basement cheap. The tool “not only allows for ultra-low product cost but also makes it possible to scale to large volume without requiring ever larger external funds,” says Rosencheisen.

Furthermore, the tool is boosting Nanosolar’s already-ambitious production potentials at its plants in San Jose, Calif. and Germany, although Rosencheisen didn’t say by how much. The company is still scaling up at its facilities now, and has not yet hit its full production schedule.

So what does the news mean for other CIGS startups? It definitely sets a high bar. Although Heliovolt seems to be doing well, and IBM just made a big splash with its entry into CIGS, when I asked Rosencheisen which of those companies he has his eye on as competitors, he said “none”. Nanosolar, he says, is only competing with First Solar, the successful manufacturer of thin-film CdTe cells.

It’s impossible to get specific figures out of Nanosolar at the moment, but it sounds like the company either has, or it close to breaking the $1 per watt price barrier widely considered competitive (so no subsidies would be required). And if it is now cheap for the company to expand its production, there could be a lot more thin-film cells on the market over the next few years than anticipated.

Photo credit: Flickr / kluv32

HelioVolt CEO BJ Stanbery is set to announce that his company has set a new speed record for CIGS conversion efficiency, ratcheting up the pressure in the competitive, high-stakes thin-film solar cell sector. The Austin, Texas, start-up, which raked in a cool $101 million in second round funding last October, claims its proprietary FASST reactive transfer printing process can produce cells with a 12.2% conversion efficiency in a mere 6 minutes.

This latest technological breakthrough comes as HelioVolt and competitors such as Nanosolar, Miasole, Solyndra and OptiSolar race to bring the cheapest, most efficient solar cells to market. All are competing to lower the cost of solar cells by using copper indium gallium selenide (CIGS) instead of the costlier, but more efficient, crystalline silicon material. Silicon solar cells have a conversion efficiency of around 14-20%.

Nanosolar, the most heavily-funded thin film firm outside of the public market and one of the first to commercially sell its cells, broke the crucial $1 a watt price point in December — an important metric because it means cells can become competitive with conventional sources of electricity — and First Solar (NASDAQ: FSLR), the largest publicly traded thin-film firm, is close to doing so.

HelioVolt’s FASST process helps reduce costs by building CIGS cells 10-100 times faster than its competitors’ processes, Stanbery says. The 12.2% efficiency figure was independently confirmed by scientists at Colorado State University. Stanbery added that there was still much room for improvement, and that his company was focusing on squeezing a higher efficiency out of its cells.

The FASST printing process can directly apply (or “print”) thin film layers to a variety of substrates, including glass substrates for solar modules, roofing tiles and other construction materials. HelioVolt said last Tuesday that it would partner with Architectural Glass & Aluminum to develop building-integrated photovoltaic (BIPV) products.

Stanbery hopes to make a dent in silicon’s once indomitable lead in the industry by accelerating the commercialization of the high-throughput printing process to scale production at its soon-to-be completed 20 MW plant in Austin, after which it plans to aggressively expand its operations overseas.

Though it remains to be seen whether HelioVolt remains on schedule to get its cells out by the end of 2008, the company says its record breaking technology will put it out in front of its much bigger rival, First Solar, which uses cadmium telluride to build its cells, from the get-go. Even assuming its technology is superior, HelioVolt will have a lot of ground to make up if it ever hopes to catch First Solar, which already has over a gigawatt of production capacity, and some of its other rivals, which have announced more ambitious construction plans.

Nanosolar CEO Martin Rosecheisen, whose first plant’s capacity exceeds 400 MW, scoffs that HelioVolt’s plant looks more like a pilot project than a commercial-scale one. OptiSolar recently announced plans to build a 550 MW plant in San Luis Obispo County, California. It has already started construction on a 50 MW plant in Sarnia, Ontario, with two additional 20 MW plants to come in nearby Petrolia and Tilbury.

Writing on Nanosolar’s blog, CEO Martin Roscheisen has unveiled the next prong in his firm’s business plan — a focus on municipal solar power plants of 2 - 10 megawatts in size. The idea is to build 10 acre lots on the outskirts of small cities that could feed into the municipal power grid directly.

Each lot, consisting of several rows of solar panels mounted on rails above ground, could provide up to 2 megawatts, enough to serve 1,000 homes. The panels would be mounted on rails to prevent them from affecting the surrounding wildlife and vegetation.

Nanosolar’s scheme could be scaled up to supply the needs of larger cities — for instance, 5 lots, which would generate 10 megawatts of electricity, could serve 5,000 homes. Unlike coal-fired plants, which typically take 10 - 15 years to build, solar power plants can be done in as little as 12 months — and much more cheaply.

Though Rosencheisen acknowledged the appeal of rooftop arrays, which solar installers like SolarCity, Sun Run and Sungevity focus on, he also criticized them as a business “that’s difficult to scale rapidly in a truly meaningful way,” and “a somewhat more expensive proposition.” Imagine having to hire a contractor to crawl around your roof to install an expensive array or — worse yet — having to set it up yourself, he noted irreverentially.

This small plant approach, though new to the U.S., has already been widely implemented throughout Europe and Asia in what Rosencheisen called a “silent revolution” that has yet to be picked up on by the mainstream press, and that is too often criticized by utility executives as being too costly or unrealistic. “It works, it is economic, and it is possible now,” he said.

Nanosolar has gotten plenty of attention for its claim that it can sell its cells for as low as 99 cents per watt, low enough to be competitive with non-renewable energy sources, as well as recently raising over $50 million more from EDF Energies Nouvelles. However, there are a number of other, less-sung companies that have either implied or outright stated that they have a similar game plan for small-scale power plants.

SolFocus, for example, makes large solar concentrator panels, which use mirrors to focus more light onto highly efficient solar photovoltaics. Its initial product isn’t designed for rooftop installation, but would work perfectly on open spaces near facilities that need modest amounts of power — such as universities or off-grid villages. It raised $63.6 million last year to build its panels in the U.S. and, through its new subsidiary SolFocus Europe, across the Atlantic.

In fact, the move to build small has swept most categories of solar power, as companies have come to realize that they can thus avoid most of the bureaucratic snags involved in building plants that produce over 50 megawatts. Furthermore, by grouping their panels into small lots, they’ve been able to grab small tracts of land on the edges of cities and towns, or on land that can be dual-purposed like farms. A secondary advantage is the ability to hook into the existing power grid without the modifications required to channel power from a large plant.

Another example is Cool Earth Solar, a startup based in Livermore, Calif. that hews to the “cheaper is better” model, using inexpensive reflective balloons to concentrate light on cells. It plans to suspend its balloons on cable-bound arrays 12-14 feet above active farmland, letting sunlight strike both the solar cells and crops beneath. The firm claims that it can produce electricity for 18 cents a watt, and hopes to ramp up its production of balloon concentrators to 50 megawatts by next year.

And there’s Infinia, a company that just raised its second round to $57 million, which specializes in the production of 3 kilowatt dishes that, lumped into groups, will generate 1-10 megawatts in small-scale projects. Finally, in the solar thermal category, there’s eSolar, which just snagged $130 million from Google, Oak Investment and Idealab to pursue a similar approach — building a number of small plants that produce up to 33 megawatts each.

The only category to have mostly stayed away from this trend is expensive silicon-based solar, which is generally relegated to rooftop installations. Yet even there a few exceptions are already starting to appear. OptiSolar, for example, a Hayward, Calif., based startup, makes somewhat less expensive thin-film solar cells. It last year announced plans to build a 40 megawatt solar power installation near Sarnia, in Ontario, Canada, and has since announced several more of a similar size.

Another day, another dollar, or $50 million of them. Nanosolar is now the most heavily-funded thin-film solar cell manufacturer outside the public market, with a new investment from a French company that wants it to churn out cells more quickly.

Nanosolar’s cells, which the company only started producing in December, are among the cheapest on the market, which is reason enough for it to continue attracting attention from investors like EDF Energies Nouvelles. The company’s CIGS technology, while less efficient than silicon, is also far less expensive, and most other CIGS makers don’t have a product yet. Its pricing is reportedly competitive with First Solar (NASDAQ: FSLR), a thin-film manufacturer with a $20 billion market cap.

That doesn’t mean a great deal at the moment, because the market is begging for cheap solar cells; true competition will take a couple years more. That will give Nanosolar time to lower costs more by scaling up production further. CEO Martin Rosencheisen told me that the company’s two existing facilities are capable of producing more than 100MW of cells each year at top capacity, and it will probably be building more factories soon.

Exactly how much has Nanosolar raised? By my count, it’s at about $170 million, including a large Department of Energy award. According to several sources, the company shopped itself out for the latest round at a $2 billion valuation.

If that valuation keeps rising, the only options remaining will be a big-ticket acquisition by a larger company or, more likely, an IPO — but the company and its investors will probably want to wait until some of the current market woes have worked themselves out. That could be the end of this year, by which time it will likely be hungry for more capital anyway.

updated

A day after Silicon Valley solar cell company Nanosolar said it has begun manufacturing and sales of its solar cells, rival HelioVolt declared it too is building a solar cell production plant, in its hometown of Austin, Texas.

Both companies are competing to build cells from material called copper indium gallium selenide (CIGS), which they hope will lower the cost of solar cells dramatically, compared to the dominant material today: expensive silicon.

The timing of the announcement by HelioVolt, the second most heavily-funded CIGS maker after Nanosolar, might be intended to show the younger company isn’t falling too far behind its competitors.

However, the Austin HelioVolt plant will produce only about 20 megawatts worth of cells each year (update: the company says it will be able to scale production over 20MW), while Nanosolar’s San Jose plant is built to produce more than 400MW of cells a year. Nanosolar CEO Martin Rosecheisen remarked that HelioVolt’s effort looks more like a pilot project, not a commercial-scale plant.

The real challenge for the HelioVolt plant will be not in capacity, but in how cheaply it can make cells and how efficient they are in converting sunlight to electricity. So far, no player has nailed both of these well enough to threaten silicon’s dominance of the industry.

Until it begins producing cells — in late 2008, says HelioVolt — there’s no telling how closely it can compete with Nanosolar, which says it can churn out cells for less than a dollar per watt (an important price point, because it becomes competitive with other sources of electricity).

First Solar, a publicly traded company that uses a material called telluride to make similar thin-film solar cells, is also close to being able to produce cells for under a dollar per watt, and plans to have over a gigawatt of production capacity by early 2008. Its initial production runs quickly sold out.

Other CIGS startups, notably Miasole and Solyndra, have yet to set up their own plants. All of the CIGS makers have run into problems with production, to one extent or another, so it should be interesting to see whether HelioVolt remains on schedule to roll out its first cells late next year.

Some five years after its founding, and a year and a half after announcing a huge solar cell factory in the Bay Area, Nanosolar has become one of the very first companies to begin commercially selling thin-film solar cells.

Nanosolar’s cells use an “ink” thin enough to be painted onto a flexible backing. The company isn’t alone in making these CIGS cells, so-called because of the conductor compound they use (copper, indium, gallium, diselenide). However, it may have one of the cheapest ways of making them.

Much of the excitement over Nanosolar is because of the price for the cells — which the company says is as low as 99 cents per watt, low enough to be competitive with traditional energy sources. While plenty of other companies have claimed to be able to manufacture for similarly low prices, they’re not actually producing cells yet.

Nanosolar’s first commercial client is Beck Energy, which will build a one-megawatt installation in East Germany, near the company’s other factory.

Although a single megawatt isn’t much — only about enough to power 400 homes — most solar installations so far have been small. For example, an 8.22 megawatt installation just completed by SunEdison in Colorado will be one of the largest.

However, Nanosolar’s factories have the capacity to pump out well over 100 megawatts of cells each year. The company may just be proving that solar power is ready to enter the big-time.

Nanosolar, the company using a new material called CIGS to make lower cost and more flexible solar cells,  has received $20 million more in financial backing, this time from the U.S. Department of Energy.

The award was part of the Solar America Initiative, which provides financing to companies to further solar power. The award is important for Nanosolar because the Silicon Valley company is in the critical phase of building production plants to produce its new solar cells, and it’s up against a host of competitors. Many of them are well funded, but are suffering setbacks as the production phase of the technology proves more difficult than they’d realized.

Other companies also got DOE awards. They include larger, more established companies,such as SunPower, First Solar and General Electric. However, Nanosolar, of Palo Alto, Calif., won the largest amount.

Amid all the excitement about new solar technology, several promising companies are slipping on their delivery dates.

However, most of the companies still say they plan to deliver — it’s just a matter of time before they hit the market

Solyndra, a Santa Clara, Calif. solar company (see VB’s coverage), has seen one of its executives, Monier Nessim leave, after that company returned to more basic research and development, instead of push on toward production. Investors Redpoint and CMEA did not respond to a request for comment. The company could not be reached for comment. The company recently raised $79 million.

Meanwhile Palo Alto, Calif. start-up Nanosolar saw the departure of Chris Eberspacher, a recognized expert in solar “thin film” technology. Like Solyndra and several other companies, Nanosolar’s thin film approach uses a new flexible compound called CIGS for its solar cell material. The cells are cheaper to make, and can used for coating on large expanses of roofs and parking lots. The question surrounding them, however, is whether they will be efficient enough at converting the sun’s energy to be able to compete with silicon solar cells.

CIGS stands for copper-indium-gallium-selenide, and is made of those four elements.

Eberspacher was chief scientist at Nanosolar, and it isn’t clear why he left (see CNET Michael Kanellos’ story here, which first talked about the departure). CEO Martin Roscheisen said Nanosolar’s timing is still on track. While several years ago he suggested informally that the technology might be ready by 2006, that was never a firm date, he said. He said things are going well, and that Eberspacher’s departure does not impact the company. Werner Dumanski, who previously ran IBM’s storage disk R&D, product development, and manufacturing operations, has taken over Eberspacher’s job. He said: “Werner is the right guy in charge of this in this phase of our company.”

Eberspacher, meanwhile, is in talks to join Miasole, a Santa Clara, Calif. company doing something similar with CIGS. However, Miasole itself has slipped more noticeably. David Pearce, chief executive, had said in 2005 and 2006 his company would be in full production by now, but that hasn’t happened. (CNET’s Kanellos has another good story about this here.) Pearce tells VentureBeat that while the company has gotten its solar cells to the eight percent efficiency rate needed to grab a large market share, he hasn’t been able to do that in real production conditions — but that he hopes to soon. He plans to roll out production this summer.

He points to competitor First Solar, an Arizona publicly traded company that now has the highest market value ($5 billion) of any solar company. It uses thin-film solar technology too, but applies telluride, not CIGS. The company took 15 years of tinkering and testing before its cells became competitive. Telluride is much less efficient than CIGS in a lab setting, for instance. Its product began at six percent efficiency, but by last year it reached the desirable range of eight percent. That sparked demand so great that First Solar sold out of its product. First Solar went public in November. Now the company’s cells boast a nine percent efficiency. While that efficiency is still below that of silicon — used by companies such as SunPower ($4 billion market value) — it is much lower in cost, and so is still more desirable.

So it takes time. Pearce said he replaced Tim Starkey, his executive vice president of operations, with someone with more technical depth. He hired Stephen Barry, a thin film expert from the data storage industry, as vice president of operations, and Dallas Meyer, formerly at Seagate, as vice president engineering. He’s also in the process of raising more money, and has finished raising a significant portion of that — at a valuation that is higher than the round Miasole raised last October, from both new and existing backers. He expects to wrap up the rest by early July.

In separate but related to green tech:

See two-part series the Mercury News recently ran this week about California’s energy challenge:

First part: Is renewable energy enough?
Second part: Nuclear power?

And finally, see the unfortunate piece today about the Bush administration making a pro-auto industry pitch to members of Congress, urging them to oppose California’s efforts to enforce tough emissions standards on vehicles. The language of these pitches sounded suspiciously as if it were taken directly from the car lobby, according to the report.

The U.S. Department of Energy has awarded $168 million to 13 solar companies, many of them Silicon Valley start-ups, in what is the equivalent of manna falling from heaven for these companies.

It is cut-throat industry, where solar projects are expensive and difficult to get off the ground, but once at high-levels of production can prove efficient and profitable.

Just last week, a group of ethanol companies were awarded similar grants, to help create alternative fuels.

These are the most valuable awards yet for the start-up community’s push to create alternative energy sources to gasoline and natural gas.

The awards are part of President Bush’s Solar America Initiative.

The latest awardees include Berkeley’s PowerLight, and its parent company, San Jose’s SunPower. Particular noteworthy are the awards to Palo Alto’s Nanosolar and Santa Clara’s Miasole, two companies that are producing really thin sheets of solar cells that can be spread efficiently across vast areas, such as parking lots or roofs of large companies.

Miasole’s grant begins at $5.8 million for the first year and will total about $20 million over three years if it meets certain targets. Nanosolar will get about $20 million over three years if it meets its milestones.

More details here.

The state of California began investing in green technology companies three years ago, arguing this would support job creation.

Ironically, while green companies are sprouting up everywhere as a result, the state is now considering having to pay them to stay in California, now that the companies are actually about to create jobs. A group of California lawmakers is proposing legislation to create a $45 million clean-fuel technology fund, to keep companies like San Carlos, Calif.’s electric car company, Tesla Motors. Word is, they’re considering wooing Tesla with $20 million in subsidies.

Here’s the story behind Tesla: Led by then-treasurer Phil Angelides, the large public pension funds such as CalPERS and CalSTRS, together with CalCEF, began pumping money into venture capital firms three years ago, earmarking it for green technology start-ups. VantagePoint Venture Partners, one of the beneficiaries, is a backer of Tesla.

However, the electric car maker (which we first wrote about here), founded here, wants to expand and is considering building an electric car plant in Pittsburg.

Hat-tip to the Merc’s Vindu Goel, who has recently launched his own blog about Silicon Valley, and pointed this out to us. He correctly suggests $20 million is a lot of taxpayer dollars to be paying to one company. Indeed, the company may not even succeed. It is a very high-end performance car, and high-priced too. Questions remain whether Porsche lovers will really go for something like this. And if they do, how many? What if the company goes bankrupt? Should we the taxpayers create a state green bankruptcy fund to support it a third time?

There’s a similar case unfolding with Nanosolar, a cutting-edge venture-backed solar company in Palo Alto, Calif., which has negotiated with San Jose about building a factory there. The city recently approved $2 million in subsidies to host the factory there (more context here).

[Update: Tesla's Darryl Siry responds below in comments]

Nanosolar, the Palo Alto solar company that will print solar cells made of nanoparticle ink on just about any surface, has selected San Jose and Germany for its manufacturing.

Nanosolar said earlier that it would make a decision by the end of this year (see our piece). The step is significant because multiple so-called “thin film” start-ups are racing to establish themselves in the market, and Nanosolar appears to be first to hit the large-scale manufacturing stage. Nanosolar is picking high-cost Silicon Valley for its manufacturing, even though costs in China are much lower. It says it will build enough solar cells to generate about 400 megawatts of electricity — or about three times the country’s current output. Nanosolar’s Martin Roscheisen told VentureBeat about the decision late yesterday.

There are more details in the Mercury News today.

The company has financial backing from Mohr, Davidow Ventures, and the Google co-founders, among others.

TJ Rodgers is chief executive of Cypress Semiconductor, which is the primary shareholder of the fast-growing silicon panel company, SunPower.

SunPower has excelled in the market by focusing on making silicon more efficient — even if silicon looks feeble compared to promise other, newer materials. CIGS (copper indium gallium selenide), for example, is cheaper and more flexible, scientists say — it can be sprayed like paint onto just about any surface.

But Rodgers, an outspoken Ayn Rand adherent, says silicon has been studied so much in recent decades, and is therefore so reliable, that his company will wipe out newcomers like Nanosolar, which is unveiling a product based on CIGS.

“Silicon has a reliability record which is unmatched by any other material,” he told CNET. “They could rename the company NanoDollar, because that’s all they are going to be left with after we get done kicking their butt,” Rodgers said referring to Nanosolar.

This is a counterpoint to the comments of venture capitalist Vinod Khosla, about how science trumps everything — when it comes to multiplying resources. Translation of science into actual business application is unpredictable, and can take a long time for superior science to take over a market.

We’ll see if this is true for Nanosolar, which is due out on the market soon.