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Signet Solar applies for federal funds to fuel thin-film strategy

by Camille Ricketts, June 25, 2009

Signet Solar, a Menlo Park, Calif.-based maker of thin-film solar panels, has applied for federal loan guarantees in addition to capital-raising efforts to aggressively expand its operations in the United States in the next three years.  The company’s plan is to install four production lines with the capacity to manufacture 65 to 80 megawatts-worth of solar panels a year in New Mexico. Each of these lines is predicted to cost $200 million to build and is dependent on technology acquired from Applied Materials. Construction will begin this year in hopes of ramping up panel production by 2011. Signet says it filed its application to the Department of Energy in February and is in talks with several private backers for the project already.

The government will evaluate the company’s current business plan, partnerships, and revenue growth to determine how much money it will receive. Signet says it hopes to receive loan guarantees covering one or more of the production lines. However, it says it must be careful not to produce more panels than can be sold or paid for somehow.

Signet is already spending a great deal of money — $90 million to be exact — installing a 20-megawatt panel production line in Germany. Of course, that includes debt investments and equity from the German government. There is even some possibility that the European banks involved in this project may chip in for the American expansion. Regardless, New Mexico has already promised Signet $15 million in tax incentives for the construction.

Leaning fairly heavily on government sources of funding — including a potential 30 percent manufacturing tax credit available via the federal stimulus package — the company says that it will probably wait to seriously pursue equity until it finds out how much government support it will receive.  At the same time as it is building the new factory, Signet plans to build up its production line in Germany to produce 45 megawatts of panels every year.