NovaSolar filed for Chapter 11 in San Jose last Friday, reported Dow Jones. There were signs of trouble at the company earlier. It furloughed employees and suspended the construction of a research center in Fremont, across the bay from Silicon Valley, and a factory in China, reported San Francisco Business Times in February of this year. The company’s office building, also in Fremont, had at least four liens filed by contractors and other vendors for unpaid work.

What makes NovaSolar an interesting footnote in the history of the solar technology development is its connection to OptiSolar, whose ambition to be a major thin film manufacturer and solar power plant developer crashed rather spectacularly in 2009. The company had just opened a factory in the Sacramento area in the fall of 2008, and 60 Minutes ran a segment showing the then Gov. Arnold Schwarzenegger visiting the new factory. It also had inked a contract to sell power to the local utility, Pacific Gas & Electric, from a planned 550 MW project in central California. But OptiSolar, which had already raised over $300 million in capital, couldn’t raise enough money to continue its operation.

Founded in part by former Hewlett-Packard CTO Marvin Keshner in 2005, OptiSolar ended up selling its pipeline of unfinished solar power projects to First Solar for $400 million, a move that vaulted First Solar into a major project developer in North America.

Apparently some folks at OptiSolar didn’t give up on the company’s original dream, and NovaSolar was formed in 2010 to make thin films and develop projects. Except, this time around, the company wanted to produce the thin films – solar panels with an ultra thin layer of amorphous silicon – in China while keeping R&D in California. The company was backed by at least one Chinese investor, Portcullis TrustNet.

Amorphous silicon technology was quite popular when silicon, the main ingredient in most of the solar panels today, was expensive in the mid-2000s. But the technology isn’t as efficient at converting sunlight into electricity as silicon and other types of thin film solar technologies, and its initial manufacturing cost was high. Some amorphous silicon solar startups couldn’t reduce their production costs quick enough to compete in a market where silicon prices have dived. The technology isn’t dead, however, and seems to have found a haven in Asia, where some companies have continued to make and sell their amorphous silicon thin films.

NovaSolar’s demise also reflected an industry-wide trend of bankruptcies, factory closures and layoffs by solar manufacturers large and small over the past year as a result of an oversupply of solar panels and plummeting prices for them. American manufacturers who have gone bankrupt include Solyndra, Evergreen Solar, SpectraWatt, Konarka Technologies, and Energy Conversion Devices. Energy Conversion Devices, a developer of amorphous-silicon thin films, said yesterday it would auction its solar assets on June 26.

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The Senate passed the bill, SBX1 2, Thursday mostly along party lines and the bill is now headed to the Assembly. Brown hasn’t yet said whether he would support it, though he has styled himself as a cleantech governor, just as his predecessor Gov. Schwarzenegger did.

State law currently requires utilities to get 20 percent of the electricity from clean power by 2010 and has an executive order in place, signed by former Gov. Schwarzenegger in 2008, to require 33 percent by 2020. The California Air Resources Board also has adopted the same mandate last year by invoking its authority to carry out AB32, the climate change bill that passed in 2006 to reduce the state’s greenhouse gas emissions.

You would think both measures would make the 33 percent requirement stick without lawmakers getting involved. But there was political wrangling over several issues, including whether the Air Resources Board has the authority to boost the renewable energy mandate and oversee its implementation. Until now, the California Public Utilities Commission has been the primary authority to make sure the 20 percent mandate is met. The CPUC only regulates investor-owned utilities, which serve the vast majority of Californians.

Codifying the 33 percent mandate into law also would make it harder to change it, and as a result some lawmakers have attempted to pass a bill in the past few years. State Sen. Joe Simitian, a Democrat from Palo Alto, has tried to do this three times, including the bill passed by the Senate Thursday. In one of his earlier attempts, the bill won approval in both houses of the Legislature, but Schwarzenegger vetoed it. One sticking point was the bill’s requirement that would limit the utilities’ ability to import renewable power from out of state.

The current bill removed that in-state requirement. Supporters say the bill is necessary to bring more jobs and tax revenues to California. Opponents say it will send electricity prices soaring and cost the state and consumers too much money.

California’s major utilities already have turned to power producers from nearby states such as Arizona, Nevada and Oregon to buy solar and wind power. In fact, the largest photovoltaic power plant in the U.S. is currently the 48 MW Copper Mountain Solar in Nevada, and was completed by Sempra Generation last year to serve customers of Pacific Gas and Electric. Developers of a Nevada transmission project that is getting a federal loan guarantee also hope to export renewable power to California via the new transmission line. (There’s larger projects under development but not yet completed).

Meanwhile, the state’s largest utilities already have been busy signing big power purchase agreements to meet the 33 percent requirement. Their push to get more power from sun, wind, geothermal and others has spawned giant power plant projects, some of which have attracted strong opposition from environmental and community groups.

The state’s Division of Ratepayer Advocates also issued a report last week that criticized the CPUC’s review of renewable power sales contracts. The DRA contends that the CPUC hasn’t done enough to make sure utilities don’t sign overpriced contracts and then pass on those costs to consumers.

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Photo of Copper Mountain Solar project, courtesy of Sempra Generation