1366 Technologies, a company that manufactures silicon wafers that are used in solar panels, announced today that it has received a conditional commitment for a $150 million loan guarantee from the U.S. Department of Energy.

The company produces crystalline silicon wafers that are supposed to be cheaper than typical solar modules. The company’s Direct Wafer process can reduce the cost of manufacturing silicon wafers (which are used to make solar modules) by up to 80 percent, according to Greentech Media. The funding from the loan will be used to build a second manufacturing plant in the United States.

A loan guarantee helps companies attract buyers and investors for new renewable energy projects. Basically, it means the government will foot the bill if the project does not take off or is unable to get some kind of return for investors. It’s one of the ways the U.S. government is promoting renewable energy sources.

1366 Technologies raised $20 million in its second round of funding in October last year. Hanwha Chemical of Korea  — which plans to be a customer — and Ventizz Capital Fund of Germany participated in that round of funding. Returning investors include North Bridge Venture Partners and Polaris Venture Partners also participated in its second round of funding. The company has raised $46 million to date.

The company’s technology was originally developed at the Massachusetts Institute of Technology. It was awarded a $4 million grant from ARPA-E, a government-sponsored program that focuses on particularly disruptive green technology that isn’t widely marketable yet, in 2009. The company’s first silicon wafer plant should be finished in 2013 and can produce wafers for up to 20 megawatts worth of solar panels annually, the company said.