Solar Cells Info

Thin-Film Startup Raises $35M

As the silicon shortage continues, investors focus on thin-film solar technologies.
October 27, 2006
source:  Redherring.com
http://www.redherring.com/Article.aspx?a=19435

Miasolé has raised $35 million in venture capital funding to begin producing its thin-film solar cells, CEO David Pearce said Friday.

The company wouldn’t disclose investors or terms of the deal, but previous investors include Kleiner Perkins Caufield & Byers, VantagePoint Venture Partners, Firelake Strategic Technology Fund, Garage Technology Ventures, and Nippon Kouatsu Electric. The startup is using the money to expand, Mr. Pearce said. Miasolé is building a factory with the capacity to produce 50 megawatts-worth of cells annually at its offices in Santa Clara, he said. He added that the company has additional manufacturing plans, but said he wouldn’t disclose details.

The Series-C round comes after a $16-million round led by Kleiner Perkins last year (see Clean Energy Firms Get Funds), and a $5.4-million round led by VantagePoint in 2004. Thin-film solar cells use little or no silicon, the costliest part of most solar cells, and companies claim they will be able to lower costs beyond silicon-based cells.

Miasolé uses copper indium gallium selenide (CIGS), the highest-efficiency thin-film material that is also being used by startups like HelioVolt and Nanosolar (see Thin Film Solar to go Large, Nanosolar Gets $100M for PV).  Miasolé’s thin-film technology uses the “sputtering” manufacturing process used to make architectural glass and thin-film disk drives.

Mr. Pearce said he thinks the company’s materials and overall process will allow it to produce cells for 60 to 70 percent less than the cost of today’s cells. The company also claims its cells are more energy-efficient and higher quality than other solar cells.

But researchers have been working on thin films for years and have a history of missed promises, said Michael Rogol, managing director of Photon Consulting (see Solar’s Going Thin). While early thin films theoretically had lower cost structures than crystalline silicon, they have historically proven costly or difficult to manufacture on a large scale, he said.

But thin-film startups believe new materials and manufacturing technologies could finally launch thin films into viability, and venture capitalists apparently do too. Venture-capital funding for thin-film solar cells has picked up during a worldwide shortage of solar-grade silicon. Konarka, Nanosolar, and HelioVolt all have raised money (see Konarka Raises $20M in Funds, Energy Innovations Gets Cash).

Mr. Pearce said he doesn’t think Miasolé’s investors were focused on the silicon market, however, “but focused on what they thought we could do.” Matt Horton, now a principal at @Ventures, made Garage’s initial investment in Miasolé in 2004. He said Garage thought thin films were promising and that CIGS was the best material, and thought Miasolé’s manufacturing would be the key to breaking into the market.

“Everyone knows what material to use and how much, so the one that’s going to be successful is the one that’s going to be able to most efficiently manufacture the product,” he said. “You need someone with solid skills at producing materials like that, and given Dave [Pearce] and Dennis’s [Hollars, CTO] background, we thought they were the right team to do that. We thought they would have a manufacturing advantage.”

Mr. Pearce was previously the CEO of Domain Technology, which developed a system to manufacture sputtered thin-film hard drives that was later acquired by Seagate Technology, and Mr. Hollars also worked with him there. Mr. Pearce said Seagate still has three of the sputtering systems running in Milpitas, California.

While thin films are gaining interest and traction in an environment where demand is booming and a silicon shortage is constraining supply, they could be at risk if they haven’t reached high volumes and low cost once the silicon shortage ends.

So far only a few thin-film companies have begun manufacturing, including First Solar, Energy Conversion Devices’ Uni-Solar, and Global Solar Energy, and they are still at low levels. Mr. Pearce said he’s not concerned about those companies reaching production first. “There’s lots of room for more than one success story here,” he said. “I think there’s an opportunity if you’re first in a meaningful way.” He added that he expects Miasolé to be the first CIGS company to reach production, saying that production up to this point has “not been significant numbers.”

He wouldn’t give a timeline for beginning production, but said he thinks the silicon shortage is likely to end in 2008, and said it is “quite possible” that Miasolé would be in full-scale production by then.