VentureBeat

Germany’s Q-Cells, the world’s second-largest manufacturer of solar cells by volume, has invested $25 million more into Silicon Valley start-ups Solaria, which is using new materials to concentrate sun on solar cells and thereby lower their cost.

Solaria’s cells, still being tested and not on the market, will use less expensive silicon, the traditional material used in solar cells. It is one of at least a dozen venture-backed solar companies seeking ways to reduce silicon usage through concentration and use of other materials.

The investment will boost Q-Cell’s stake in Fremont, Calif.’s Solaria to 33 percent from 12.6 percent, according to a report in the WSJ. This suggests the company is valued at around $250 million (though that is not confirmed). Q-Cells is also providing the start-up with enough solar cells to generate 1.35 gigawatts over the next 10 years.

For context, that’s close to the entire amount of electricity produced by panels installed world-wide last year, or about 1.74 gigawatts, according to SolarBuzz.

Updated

Practical Instruments has raised $8 million in a first round of funding to develop what it says is the most powerful solar “concentration” technology yet.

It uses solar panels that track the sun as it moves. The panels use mirrors to concentrate the sunlight for the photovoltaic process, thereby boosting performance.

It is the latest in a wave of entrants in the booming solar power industry, and will compete against a number of other “concentration” companies, including Energy Innovations, SolFocus and Solaria. It will be presenting its technology at the Solar Power 2006 expo in San Jose this week. (See summary of the solar wave in the Mercury News today.)

RockPort Capital Partners and Nth Power led the venture capital round. Trinity Ventures and Rincon Venture Partners also participated.

The wave of solar funding joins a wider boom in alternative energy investments: In just the last few days, we’ve seen solar monitoring start-up Fat Spaniel, power management company iWatt, biofuel start-up Primafuel (Long Beach, Calif.) and biofuel start-up Amyris all raise new financing.

Practical Instruments chief executive Brad Hines said he is taking a different tack than the other solar competitors. Two years ago, Hines left competitor Energy Innovations, which users a similar tracking technology. But that technology was early and the panels required “tower” and other support structures that created panels different to those the industry was familiar with, Hines said. As a result, the company struggled to create what is effectively its own distribution channel. While Energy Innovations boasted a good concentration technology, installers didn’t know what to do with it, he said. (We wrote about Energy Innovations here last year, when it raised venture capital. We contacted Energy Innovations President Andrew Beebe for a response to Hines’ critique; he declined comment).

So Hines, who was also a “chief architect” at NASA, founded Practical Instruments (see team in picture) with the goal of making panels that are the same shape as regular solar panels. He also pledges they will cost less and produce more power. The company’s panels can produce 30 percent more power for a given area than the current leaders, he says. However, the company hasn’t started delivering its product or set pricing yet, so we’ll see if he pulls this off.

The company’s technology resides on the rooftop, and so can be installed on more buildings than, say SolFocus, which requires a ground mounting and is more focused on serving utilities, he said.

Solaria, another company we’ve written about, has raised money for panels with concentration technology — but its technology does not use tracking, and so it’s limited to only two to three times the regular concentration of sunlight on the solar cells. Practical Instruments see concentration levels of about ten times regular concentration.

The investment will fund the production of Practical Instruments’ flagship product, Heliotube, the company said.

Solaria, a Fremont start-up that offers a way for solar cell manufacturers to lower costs by using less silicon, said it has raised $22 million in a second round of funding.

The funding comes from Q-Cells, the second largest producer of silicon solar cells, venture capital firms Sigma Partners and NGEN Partners, and Moser Baer, a large Indian manufacturer of CDs and DVDs.

Solaria’s emergence is significant because it wants to solve the solar industry’s biggest bottleneck: a severe shortage of silicon available to produce solar cells. Solaria’s timing is perfect. Through serendipity, it began working a way to produce more PV modules from the same amount of silicon back in 2003, before the silicon shortage began. Solaria uses standard solar chips, and unlike other players competing in the “concentration” area does not require its cells to “track,” or rotate to follow the sun. Silicon costs between $75 and $80 per kilogram for long-term contracts, which compares to just $26 per kg three years ago. If Solaria hits the market as planned by next year, and prices stay high, it is bound to have a thriving market.

Solaria CEO Suvi Sharma has proven he is a good fund-raiser. Previously, he founded and built Ivus, an early India-U.S. IT service company, with $12 million in backing in part from Silicon Valley firm Draper Fisher Jurvetson. He raised $5 million in 2003 from a group of individual investors, many of them in solar-friendly Europe. Solaria was founded back in 1999 by Leslie Danziger, who is chairman of Solaria.

There are other “concentration” technologies on the market, but most of them aim for ambitious rates of concentration of between ten and 30 times the regular concentration of light on cells. Solaria’s technology is less ambitious, targeting only two to three times regular concentration. Sharma says that’s what gives Solaria the ability to work with standard solar cells with no tracking.

When asked about competition, Sharma said once concern about companies developing “thin-film” solar technologies, paint-like products that are close to hitting the market, and which can be spread over large areas and using materials unrelated to silicon.

However, there are plenty of large potential customers, including Sharp and Q-Cells, producing masses of silicon solar cells. Q-Cells’ investment is a vote of confidence in the company. Moser Baer, India’s largest producer of CDs and DVDs, offers expertise in high-volume production processes, and its facilities will allow Solaria to outsource its production to Moser Baer, Sharma said. Moreover, Moser Baer has just entered the solar cell manufacturing business itself. It is building a factory that will produce 80 Megawatts a year — and so may also become a customer of Solaria’s.

This is venture firm Sigma’s first clean-tech deal.

Solaria has a pilot production facility here, and has 20 employees. It is hiring new engineering and operations professionals to its team.