June 21, 2006 3:00 AM PDT

With hefty funding, solar start-up takes on big guns

Nanosolar is only a few years old, but it has laid plans to take on multinational corporations, such as BP and Sharp, in the solar industry.

The Palo Alto, Calif.-based company on Wednesday announced that it now has the funding to get started on volume production of its photovoltaic technology. It plans to build a manufacturing facility in California that will eventually produce 430 megawatts of solar cells per year, making the company one of the largest solar producers in the world in the span of a few years. Nanosolar will also build a plant in Germany for taking the solar cells and fitting them into solar panels.

Cost is the company's primary weapon, said CEO Martin Roscheisen. Rather than producing solar cells made out of rigid silicon, the company has come up with a way to embed CIGS (copper-indium-gallium-selenium) into thin polymer films. Ultimately, a solar panel from Nanosolar will cost about one-fifth to one-tenth the cost of a standard silicon solar panel, and expanding factory capacity will be easier, according to the company.

"For (traditional manufacturers) to build a 400-megawatt facility, it costs $1 billion. It costs us a tenth of that," Roscheisen said. "It is a roll-to-roll process. It is much simpler. There are three miles of solar cells on a single roll" of polymer film, he said.

Initially, Nanosolar will embed its CIGS solar cells into relatively standard solar panels and sell them to utilities for solar farms. Later, plastic sheets coated with the particles will generate electricity on the rooftops of big box retailers, he added.

Backing this rapid expansion is a wide array of investors who have committed an eye-popping $100 million to the company. Investors include Mohr, Davidow Ventures, Google's Larry Page and Sergey Brin, the venture vehicle of eBay's Jeff Skoll and OnPoint, the venture arm of the U.S. Army. Roughly $75 million of the total is in equity, while the remaining $25 million consists of subsidies and other types of funding.

Over the past two years, investors have begun to flock to alternative energy companies in the face of rising prices of oil and electricity.

Solar companies have been some of the chief beneficiaries of the trend. Demand has grown so rapidly that a shortage of silicon panels that began in 2004 will likely last into next year. Builders have also begun to incorporate silicon solar panels into new homes.

Looking for a silicon successor
Silicon, however, is not an ideal material for solar panels, according to experts and even solar manufacturers. At a theoretical maximum, silicon solar panels can convert around 30 percent of the sunlight that strikes it into electricity. In practice, commercial solar cells convert anywhere from 10 percent to 20 percent of sunlight into electricity.

Silicon also remains costly to produce. In the end, a solar-produced kilowatt might cost 35 cents, while a kilowatt straight from the grid might cost 25 cents, said Ron Kenedi, general manager of solar systems at Sharp. Hence, governments in Japan, Europe and the U.S. subsidize the cost of solar equipment.

Thin-film companies such as Nanosolar and HelioVolt say they can provide the same level of efficiency in producing electricity as silicon panels. The difference is that their panels are effectively printed sheets of plastic, dramatically cutting costs. As an added bonus, a thin-film solar cell is just that--a thin sheet. The material, therefore, can be placed on a wide variety of surfaces, or even get incorporated directly into roofing tiles or building glass.

Other types of thin films have failed in the past, but CIGS thin films are more durable, say backers. The potential of CIGS has even begun to attract large companies, such as Shell. Silicon manufacturers dispute this, and in the past several months a heated competition has cropped up between silicon and CIGS companies.

"We're going to have the economies of scale of the print business," said Erik Straser, a partner at Mohr, Davidow Ventures.

Nanosolar currently has a pilot manufacturing facility and will begin to produce solar cells on the upcoming factory in 2007, said Roscheisen, who started the compay in 2001 after selling off a string of Internet companies. The factory won't be capable of producing 430 megawatts a year at first; that's the ultimate capacity, he added, but they will be coming out with a product. (The 430 megawatt measurement means that, if you took all of the solar cells produced by the factory in a year, they could generate 430 megawatts at a given instant.)

The company has also begun to line up supply agreements with customers, said Straser. In the past year, Nanosolar has begun to hire manufacturing executives--such as Werner Dumanski, who worked in the hard drive divisions of IBM and Hitachi--to help it make the transition from science experiment to industrial manufacturer.

"A lot of these people started in the windows coating business. Then in the '80s, they moved into hard drives," said Straser.

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24 comments

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Heat waves?
What about extracting energy from heated air? We have lots of it every summer over here in Europe. (*)

With promised greenhouse effect, air serves as an accumulator of energy - we just need way to extract it.

(*) In other words, I want to be paid for having air conditioning in my house ;-)
Posted by Philips (400 comments )
Reply Link Flag
European Heat Wave
The efficiency of a heat exchange engine is a function of the ratio of the input temperature to the output temperature. Unless Europe gets really, really, REALLY hot or you have a big block of liquid helium to work with you're not goign to generato all that much power, sorry.
Posted by OrionCA (24 comments )
Link Flag
Heat waves?
What about extracting energy from heated air? We have lots of it every summer over here in Europe. (*)

With promised greenhouse effect, air serves as an accumulator of energy - we just need way to extract it.

(*) In other words, I want to be paid for having air conditioning in my house ;-)
Posted by Philips (400 comments )
Reply Link Flag
European Heat Wave
The efficiency of a heat exchange engine is a function of the ratio of the input temperature to the output temperature. Unless Europe gets really, really, REALLY hot or you have a big block of liquid helium to work with you're not goign to generato all that much power, sorry.
Posted by OrionCA (24 comments )
Link Flag
Shell is contacting them
Hasn't it been gas companies in the past that have paid other enery-source seeking companies NOT to produce their new technology? Wonder why Shell would have any interest at all in a solar technology company??????? I smell an oily, gassy bribe.
Posted by swenson86 (2 comments )
Reply Link Flag
Shell and solar
I don't know if I'd go too far with the theory that shell will try to shut down solar. They and BP make a lot of money off of their solar divisions. Besides, the big game for these guys is transportation. Even if everyone starts rapidly adopting solar or hybrids or electric cars, the vast majority of the world's energy wills still come from the ground.
Posted by michael kanellos (65 comments )
Link Flag
Don't be an Imbecile
The oil companies have nothing against solar cells, because big oil does not provide petroleum products to produce electricity. Electricity is produced from nuclear, natural gas, coal, hydroelectric dams, wind, and the sun. The oil companies provide petroleum products primarily for transportation.

Solar cells that are cheap to install, would save them a fortune in powering oil pumps and all of their refinery operations. That will save you a pretty penny until hydrogen power is available in the next decade. This new technology is welcome news. If they can step up the production to a gigawatt a year, then we can reduce coal use at the very minimum. That will greatly clean up the environment and reduce green house gases.
Posted by Terry Gay (127 comments )
Link Flag
You are Confusing the Issue
The oil companies have nothing against solar cells, because big oil does not provide petroleum products to produce electricity. Electricity is produced from nuclear, natural gas, coal, hydroelectric dams, wind, and the sun. The oil companies provide petroleum products primarily for transportation.

Solar cells that are cheap to install, would save them a fortune in powering oil pumps and all of their refinery operations. That will save you a pretty penny until hydrogen power is available in the next decade. This new technology is welcome news. If they can step up the production to a gigawatt a year, then we can reduce coal use at the very minimum. That will greatly clean up the environment and reduce green house gases.
Posted by Terry Gay (127 comments )
Link Flag
Shell is contacting them
Hasn't it been gas companies in the past that have paid other enery-source seeking companies NOT to produce their new technology? Wonder why Shell would have any interest at all in a solar technology company??????? I smell an oily, gassy bribe.
Posted by swenson86 (2 comments )
Reply Link Flag
Shell and solar
I don't know if I'd go too far with the theory that shell will try to shut down solar. They and BP make a lot of money off of their solar divisions. Besides, the big game for these guys is transportation. Even if everyone starts rapidly adopting solar or hybrids or electric cars, the vast majority of the world's energy wills still come from the ground.
Posted by michael kanellos (65 comments )
Link Flag
Don't be an Imbecile
The oil companies have nothing against solar cells, because big oil does not provide petroleum products to produce electricity. Electricity is produced from nuclear, natural gas, coal, hydroelectric dams, wind, and the sun. The oil companies provide petroleum products primarily for transportation.

Solar cells that are cheap to install, would save them a fortune in powering oil pumps and all of their refinery operations. That will save you a pretty penny until hydrogen power is available in the next decade. This new technology is welcome news. If they can step up the production to a gigawatt a year, then we can reduce coal use at the very minimum. That will greatly clean up the environment and reduce green house gases.
Posted by Terry Gay (127 comments )
Link Flag
You are Confusing the Issue
The oil companies have nothing against solar cells, because big oil does not provide petroleum products to produce electricity. Electricity is produced from nuclear, natural gas, coal, hydroelectric dams, wind, and the sun. The oil companies provide petroleum products primarily for transportation.

Solar cells that are cheap to install, would save them a fortune in powering oil pumps and all of their refinery operations. That will save you a pretty penny until hydrogen power is available in the next decade. This new technology is welcome news. If they can step up the production to a gigawatt a year, then we can reduce coal use at the very minimum. That will greatly clean up the environment and reduce green house gases.
Posted by Terry Gay (127 comments )
Link Flag
We need a "Matter-Anti-Matter" machine
An unlimited power supply...
You know, like the machine Scotty used to say "we're giving you all she's got Captain".

I miss James Doohan.
Posted by technewsjunkie (1265 comments )
Reply Link Flag
I'm anti-matter...
...If it matters, I'm against it! :)
Posted by J_Satch (571 comments )
Link Flag
I gotta admit that's good squishy
purpetual-power generators and the replicator are pretty clean solutions to most of the worlds problems.

Most conflict is over resources when you get to the basics of it. Even nations that have been fighting so long they've forgotten the original argument and replaced it with religion can trase teh conflict to the same source; a whole bunch of people that need the same bucket of water to survive. Some cases it's over money, some cases it's over the actually needs of life represented by and aquired with money.

Most limitations of energy production are due to unclean methods of generation and delivery infrastructure.

Scotty's purpetual energy machine could be made small enough for one per home or to replace batteries in everything powered all together. No more consuming the earth like a cancer or messy "oops" accidents.

The replicator feeds the world cleanly and healthily while replacing the flawed money based economy with a matter based economy.

It's a nice clean solution if your dreaming up a science fiction setting and need to do away with current world politics in creating your setting's backstorey.

Of course, the energy industry isn't going to let go of it's monopoly, polititions will aways start wars for personal or political gain and differences of opinion will always ellicit a violent response when it threatons a persons safety or sustinance.

Sorry, no plastic pointy ears in my closet. I can just apreciate optimism such technology is born out of.
Posted by jabbotts (492 comments )
Link Flag
We need a "Matter-Anti-Matter" machine
An unlimited power supply...
You know, like the machine Scotty used to say "we're giving you all she's got Captain".

I miss James Doohan.
Posted by technewsjunkie (1265 comments )
Reply Link Flag
I'm anti-matter...
...If it matters, I'm against it! :)
Posted by J_Satch (571 comments )
Link Flag
I gotta admit that's good squishy
purpetual-power generators and the replicator are pretty clean solutions to most of the worlds problems.

Most conflict is over resources when you get to the basics of it. Even nations that have been fighting so long they've forgotten the original argument and replaced it with religion can trase teh conflict to the same source; a whole bunch of people that need the same bucket of water to survive. Some cases it's over money, some cases it's over the actually needs of life represented by and aquired with money.

Most limitations of energy production are due to unclean methods of generation and delivery infrastructure.

Scotty's purpetual energy machine could be made small enough for one per home or to replace batteries in everything powered all together. No more consuming the earth like a cancer or messy "oops" accidents.

The replicator feeds the world cleanly and healthily while replacing the flawed money based economy with a matter based economy.

It's a nice clean solution if your dreaming up a science fiction setting and need to do away with current world politics in creating your setting's backstorey.

Of course, the energy industry isn't going to let go of it's monopoly, polititions will aways start wars for personal or political gain and differences of opinion will always ellicit a violent response when it threatons a persons safety or sustinance.

Sorry, no plastic pointy ears in my closet. I can just apreciate optimism such technology is born out of.
Posted by jabbotts (492 comments )
Link Flag
FINALLY
Finally, solar power will hopefully come down in price so most of us can use it!
Posted by zxocuteboy (45 comments )
Reply Link Flag
FINALLY
Finally, solar power will hopefully come down in price so most of us can use it!
Posted by zxocuteboy (45 comments )
Reply Link Flag
 

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