to build a key piece of machinery to make its CIGS solar cells, and then raise another $100 million by the end of this year to build a very large factory. With Silicon Valley venture capitalists reluctant to invest in solar, Mattson is trying to raise money from private equity firms or national governments willing to provide incentives for domestic solar manufacturing. “This is the hardest $15 million I ever raised,” says Mattson who has worked in the semiconductor industry for 25 years.
Despite the financial headwinds for solar cell companies, the general spending environment on solar technology appears to be improving. Much of the cost reductions in solar panels over the past five years have been through brute force: Chinese companies, in particular, built giant factories that lowered costs through economies of scale and flooded the market with products. But now, some people argue that more technical innovations will be needed to lower prices further and to meet global solar demand.
Installer SolarCity, a pioneer in residential solar financing, acquired Silevo to get access to its cell technology and fuel its future growth, company executives say. With more efficient panels, SolarCity can pack more power-generating capacity on a rooftop and lower labor and other equipment costs. “In order to have solar power compete on an unsubsidized basis with fossil fuel energy coming from the grid, it’s critical that you have high-efficiency solar panels and a total installed cost as low as possible,” chairman Musk said during a conference call announcing the deal.
A number of other companies are trying to improve efficiency and lower costs in different ways. In addition to Solexel and Siva Power, there are thin-film producers RSI and Scifiniti in San Jose, as well as thin-film silicon cell maker Crystal Solar in Santa Clara, CA. In the Boston area are Bandgap Engineering, which is developing a nanowire treatment to boost the efficiency of traditional silicon solar cells, and 1366 Technologies, which has developed a cheaper method for producing silicon wafers.
“There is a strong push for differentiation. The industry is heavily commoditized—80 percent of the product is virtually indistinguishable,” says Solexel’s Kerstens. The company’s solar cells are flexible and lightweight as well as being more efficient than standard silicon cells, which means its cells are well suited for being embedded into roofing material. “When you combine high efficiency… with a differentiated form factor, it just opens up a whole new range of applications that haven’t been served very well.”
Over the past few years, much of the entrepreneurial activity—and venture capital interest—has been on “downstream” solar, or finding ways to lower installation costs and finance panels with leases to avoid the upfront costs. But as the global glut of solar panels gets absorbed, more startups seem to be betting that manufacturers will start investing in “upstream” solar, or techniques to improve performance of panels and lower the cost of production.
“We need a lot of innovation to lower the capital intensity of solar,” argues Siva’s Mattson. “I’m a believer in the upstream side, but we’ll have to see if [investors] see it, too.”
As of now, few, if any, solar manufacturing startups that survived the shakeout can say they are producing panels at commercial scale. But given Silicon Valley’s rich history in semiconductors, it could still play a role in bringing down the price of solar closer to the grid in the years ahead.
