Concentrating photovoltaic (CVP) maker SolFocus has a long uphill climb to compete with standard solar panels, the flat silicon-based arrays most people are familiar with. Standard PV is well understood, with predictable costs. Yet numbers SolFocus just released for its newest product line suggest that PV makers may have reason to worry.

As I guessed a couple weeks ago when the company announced a $100 million deal for its panels, the newest generation of SolFocus panels average 25 percent efficiency at converting sunlight to electricity. That’s a significant jump over the company’s 18 percent first generation product, but an even larger advantage over the average PV panel, which gets about 15 percent.

While SolFocus won’t release exact numbers for how cost-effective its panels are — a more important metric — the company’s VP of marketing, Nancy Hartsoch, was willing to give me an idea of how the new generation stacks up versus alternatives. The panels themselves, she says, are approaching dollar per watt parity with silicon PV, meaning the cost to install them.

However, once installed, if you go by the above numbers, a SolFocus panel is about 66 percent more efficient than the same PV panel.

While silicon PV is slowly improving, it doesn’t look like current products will hit 25 percent efficiency anytime soon, perhaps ever. And in the meantime, SolFocus is working to milk even more efficiency out of its own systems. Hartsoch says later generations are projected to top 30 percent efficiency, likely within three to five years.

These numbers become more meaningful when you look at how quickly costs for each product will decline. Silicon PV is dropping in price about 5 percent a year. Hartsoch says that SolFocus will bring prices down 10 to 15 percent yearly.

There are some associated costs that come with SolFocus panels, like the tracking systems to keep them aimed at the sun. But the story in the long run is how much electricity from the panels costs. If SolFocus — and other CPV manufacturers — can prove their systems are durable and reliable, they have a much stronger sales pitch.

The other issue is how quickly CPV production can be scaled up. The answer is, no more quickly than other technologies. SolFocus is expecting to hit 200 megawatts of yearly capacity by 2010, and 400MW the next year, starting from almost no capacity at the current moment. That’s as quickly as they can move, although scale may come more rapidly afterwards.

Thin-film solar, the other growing market that silicon PV makers like Suntech have to worry about, is moving at a similar speed, although it’s a few years ahead, development-wise, of CPV.

As with most renewable energy, it takes time for these markets to develop. But as we move into the next decade, the equation looks to be changing to favor the newcomers. Of course, in time, such so-called second-gen offerings will have to look out for technologies that are even further out, like nanotech-engineered solar panels and thin-film concentrating systems.

SolFocus, by the way, is working on raising a $60 million venture round. The company has taken $93 million to date. The company is based in Mountain View, Calif. and Madrid, Spain.