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With the prices of silicon falling, competition heating up among solar equipment makers and solar manufacturing capacity expected to far exceed demand this year, it may seem like the worst possible time to build a solar factory. Yet several thin-film startups, such as PrimeStar Solar and […]

With the prices of silicon falling, competition heating up among solar equipment makers and solar manufacturing capacity expected to far exceed demand this year, it may seem like the worst possible time to build a solar factory. Yet several thin-film startups, such as PrimeStar Solar and Applied Quantum Technology, are doing just that.

Arvada, Colo.-based PrimeStar Solar, which is developing cadmium-telluride films, is building its first commercial factory in San Francisco and plans to have it up and running by the fourth quarter of this year, CEO Brian Murphy said at the Intersolar North America conference Thursday. The company, which was founded in 2007 and is backed by GE, opened a pilot plant in October of last year. That plant has been making full-sized panels (about 2×4 feet) in small quantities and testing them in the field. Now, the company is building a high-volume, automated factory, Murphy said.

PrimeStar’sIntersolar’s technology was initially developed by the National Renewable Energy Laboratory, which said it had achieved a world record efficiency of 16.5 percent in the lab. It’s unclear what efficiencies PrimeStar has been getting at the pilot plant, but Murphy said the company achieved “double-digit” efficiency with mini-modules last year.

PrimeStar plans to sell its modules to utilities for large-scale solar projects, where it sees the biggest opportunity for cadmium-telluride films. But selling solar in 2009 and 2010 is likely to be a challenge for everyone. Murphy tells us:

“The reality is…very few people are buying. We’ve been hearing how the United States is going to be tomorrow’s PV market, but tomorrow is not today…It’s going to be 2011 at the earliest before U.S. power consumption is back at the level is was at in 2008, so utilities don’t have the need for additional capacity today.”

That doesn’t sound like good news for a company that plans to begin production this year. But while PrimeStar’s factory is ultimately expected to have the capacity to produce tens of megawatts and hundreds of thousands of panels per year, it will take some time to ramp up to full capacity. Murphy said the company hopes the market appetite will improve by then.

Meanwhile, Santa Clara, Calif.-based Applied Quantum Technology, which is developing technology to reduce manufacturing costs for cells based on copper-indium-gallium-diselenide, is building a 15-megawatt pilot factory, Brian Bartholomeusz, vice president of operations and business development, tells us. The company, which is using a technology to make solar cells called reactive sputtering, expects to begin selling in 2011, Bartholomeusz said. Applied Quantum also has achieved double-digit efficiencies, validated by the National Renewable Energy Laboratory, and ultimately hopes to design factories that can by modular, “bolt-on” attachments to glass plants around the world.

Another CIGS company, SoloPower, also last week announced it hopes to get a government loan guarantee to build a commercial factory next year. Alain Harrus, a partner with Crosslink Capital, an investor in SoloPower, told us it’s important to work toward mass production now, even though the market isn’t ready yet: “We don’t want to miss the market window.”

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