Midsummer, based in Jarfalla, Sweden, has developed equipment and processes to make thin film solar panels, using the material copper indium gallium (di)selenide, or CIGS. If the term CIGS rings a bell, that’s because the ashes of CIGS firms have burned brightly — and burned their investors’ cash – in recent years.

Silicon Valley’s MiaSolé, which had originally impressed investors with its high conversion efficiencies, was sold at a bargain-basement price to Chinese renewable energy firm Hanergy earlier this year. Reports are that the firm was snapped up for 10 percent of the price tag the board was after. There was also Solyndra, Nanosolar, Heliovolt, and others that have struggled.

But beyond just CIGS, the entire solar panel market is laboring under the weight of oversupply, and manufacturers have production capacities for about twice as many solar panels than the market needs. Even the big manufacturers are struggling and one of the biggest, China’s Suntech, has been unable to pay bondholders, with the subsidiary responsible for much of its manufacturing slipping into insolvency.

So it shouldn’t come as a surprise that it’ll be difficult to sell new equipment to prospective manufacturers. But that hasn’t stopped Sweden’s Midsummer. It believes its new approach to CIGS deposition offers major advantages.

Optical disk approach to solar panels

Midsummer’s approach is to produce individual CIGS thin film cells on a stainless steel substrate. The cells are “punched out” of the stainless roll before deposition. “We wanted to produce many small thin film solar cells and then later on put them together in a module,” says CEO Sven Lindström.

This approach draws on optical disc manufacturing techniques, treating each individual CIGS cells in much the same was a CD or DVD would be created. It certainly marks a departure from current thin film semiconductor deposition, which tends to be employed in a continuous process, either onto a glass substrate or a roll of stainless steel. The closest relative to the Midsummer process in PV would be MiaSolé, which uses a stainless steel substrate cut into cells. But even MiaSolé uses a continuous deposition process with the cells being sorted into efficiencies batches afterwards.

What’s the advantages of the CIGS semiconductor deposition onto individual cells? Lindström believes that it allows R&D improvements to be made more quickly and incrementally, one cell at a time. The company is aiming to produce 200 to 400 cells per hour on its equipment, and says it can change the process parameters a little for each individual cell. Midsummer employs its 2D bar coding system for the substrate, so individual cells can be logged on a database and efficiencies assessed.

Midsummer claims that other advantages include that its cells can be employed in a flexible module, which is a market segment that has been largely left open after Global Solar and Uni-Solar ceased production. The difference between Midsummer’s approach and those companies’ technologies is that Midsummer’s cells are significantly more efficient. Midsummer can produce modules with an efficiency of 14 to 15 percent, while Global Solar and Unisolar were producing modules for closer to 8 to 10 percent.

In addition, Lindstöm says the weight per square meter of Midsummer’s modules is below three kilograms per square meter, which is more lightweight than competitors. Flexible modules have been touted as a solution for commercial rooftop panels or membrane roofing, where weight load is an issue. Light weight, flexible panels could also open up other more unusual markets, like on the roofs of trains.

In terms of costs, the Midsummer claims its flexible module can be made for $1.10/W and with glass for $0.70. It has a roadmap for $0.50/W by the end of 2014, which is slightly ahead of competitors. It also believes that such costs can be achieved at a relatively small scale, tens of megawatts instead of hundreds or gigawatts.

It should be noted that while Midsummer has a line up and running in its labs in Sweden, but that the efficiency and cost results have not yet been tested in scale production. And with very few solar panel manufacturers looking to add capacity, there’s a chance that won’t happen soon.

“Nobody is buying”

While all of these advantages and this new approach appears promising, it could be incredibly hard to find buyers willing to invest in new solar panel equipment. “Nobody is adding new capacity,” at least for the next 12 to 18 months, says Finlay Colville, VP at NPD Solarbuzz. “This makes it a really big problem for anybody who is introducing a new tool,” particularly turnkey thin film lines.

But that doesn’t mean all is lost for Midsummer. It reports that an unnamed Chinese customer has one of the Midsummer lines currently installed for testing. The solar market’s geographical shift away from traditional European markets and to new ones in the Middle East and East Asia may also provide opportunities.

A GTM Research report released recently predicted that the Middle East and Africa will provide 1 GW of demand for solar panels in 2013, an increase of over 600 percent on 2012. The strong performance of thin film panels and CIGS’ in hotter temperatures could also give that technology an advantage. GTM Research’s Shyam Mehta thinks that if some of the CIGS cells that have reached 19 percent efficiency in a lab setting, could be applied to commercial production, there could be good prospects for the technology.

Even with a PV manufacturing market under considerable stress, innovation is still required to drive efficiencies up and costs down and Midsummer may allow for iterative improvements, cell by cell, for the first time in thin film. CEO Lindstöm reports that the company is well funded at present, but for its approach to make an impression it will have to start selling equipment sooner rather than later.

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The Arizona-based company developed ultra-thin solar panels using the materials copper, indium, gallium and selenium (CIGS) to convert sunlight into electricity. Venture-backed Global Solar initially sold strings of CIGS solar cells to companies that would then assemble those strings into panels. Around 2009, the company said it would focus on making flexible solar panels that forgo the use of glass as a protective cover.

Flexible panels could be a good fit for roofs that can’t bear heavy weight, or they could be shaped to resemble – or become embedded in — roofing materials. But foregoing the use of glass meant Global Solar had to find another way to protect the CIGS from its chief enemy: moisture. Companies such as 3M in recent years have rolled out protective films for moisture-sensitive solar cells, but those encapsulants tend to be expensive. A Global Solar executive told me last year that the company had found a good barrier film for its CIGS cells,  though he declined to divulge its cost or maker.

Global Solar’s star seemed to be rising when it started to work with Dow Chemical to create roofing shingles with its CIGS cells inside. Partnering with a large company meant Global Solar could lean on Dow to help promote its technology. But Dow delayed the launch of roofing shingles, especially given the home construction market was in poor health following the mortgage crisis. Dow finally launched the solar shingle product about a year ago in Colorado. It then began selling them in California and Texas earlier this year.

Global Solar had factories in Tucson and Germany. By Arizona law the company had to notify the state when it was planning any meaningful layoffs. It filed a notice in July about letting go nearly 40 employees. A Global Solar employee told Inside Tucson Business that the company was laying off about 95.

Global Solar appears to be a casualty of an imbalance of supply and demand that has persisted for two years and knocked out dozens of solar manufacturers worldwide. Major solar panel makers, including Suntech Power, First Solar and SunPower, all have shuttered production lines and posted losses as a result. Suntech recently announced its plan to scale back production and lay off about 50 employees at its Arizona factory.

Startups have had a harder time toughening it out because they typically lack the financial strength of their larger rivals. Most often times they need to be in an expansion mode – to build factories and line up customers – in order to move technology out of the labs and into the marketplace. Doing so when the market is experiencing a glut of solar panels simply lowers the startups’ survival rates. Solyndra, which also made CIGS solar panels, suffered a high-profile death last year when it was ramping up production and realizing it couldn’t compete against companies that were able to sell solar panels far more cheaply.

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The company pitched a hybrid solar cell concept and at the western regional Cleantech Open event last Friday (winners are announced today), and won over judges in the renewable energy category. The Cleantech Open will hold its national competition in San Jose next month.

The ultra efficient semiconductor materials are in the III-V family, and each III-V cell will sit on top of a silicon cell. Silicon is found in most of the solar cells on the market today, and the most efficient among them, made by SunPower, can convert 24 percent of the sunlight into electricity.

Malachite plans to stack a silicon layer with a gallium-arsenide layer to create a cell that should theoretically be able to achieve 38 percent efficiency, said Robert Weiss of Malachite during the pitch to the judges. Weiss was the former CTO of DayStar Technologies, which makes ultra thin solar panels using copper-indium-gallium-selenide (CIGS).

The III-V cells are less common because their materials and manufacturing process are more expensive. The cells are usually made with a combination of materials such as indium, gallium, germanium and arsenic. These cells are typically found in solar panels that are equipped with lenses to concentrate sunlight onto the cells to boost their energy production. Using the optical booster means the cells themselves could be far smaller, which then reduces the overall equipment and production cost. The most efficient III-V cell, made in the lab and not subject to any concentration, has achieved nearly 30 percent efficiency.

As with many solar cell technologies, the scientific concept Weiss presented isn’t new. The big challenge is to design the process and equipment to not only produce the desired efficient cells but to also produce them in large quantities at low costs. That last part is what has stumbled many solar technology startups such as the now bankrupted Solyndra and Abound Solar over the past year, especially when they were trying to scale up production at a time when there was a bumper crop of solar panels in the market and much larger rivals were able to cut prices and take losses.

Not a cell maker

Malachite doesn’t want to sell solar cells. Instead, it wants to sell the factory equipment for making those cells, perhaps to silicon solar cell makers. The III-V cells usually are made in a process called metal organic chemical vapor deposition (MOCVD), which is expensive and slow. Weiss proposes to use the physical vapor deposition (PVD) process, or sputtering, that knocks loose atoms from semiconductor materials and attach them to a substrate to form a cell. PVD has been used for making CIGS thin films.

Weiss wants to raise up to $2 million to engineer and show a workable cell design. After that, the startup will likely need $10 million to assemble the equipment to complete a prototype cell. Another $30 million should enable Malachite to deliver beta equipment to customers for testing, Weiss said.

Catching investors’ interest will be difficult these days. Many solar cell and panel makers have built up huge factories, some at gigawatt-scale, only to find that demand isn’t there yet. Some of the top 10 solar manufacturers, including Suntech Power and First Solar, have scaled back production or postponed factory expansion plans. Many have filed for bankruptcy, including veterans such as Q-Cells, which is being sold to Korea-based Hanwha Group.

GTM Research released a report on Tuesday that is projecting that 180 solar panel makers will disappear all together or get bought by 2015, and nearly half of them will close factories in places with high manufacturing costs, such as the U.S., Europe and Canada.

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Hanergy plans to buy MiaSole for a measly $30 million, according to the letter, and also reported by the San Francisco Chronicle. While the Silicon Valley solar company has been mum about how much venture capital it’s raised since its inception in 2001, published reports have put the figure somewhere between $400 million and $500 million by the end of 2011. Earlier this year, the company raised $55 million.

MiaSole was desperate for a white knight to rescue it from oblivion. After years of research and development, the company seemed to have finally nailed its manufacturing process to making solar panels out of copper, indium gallium and selenium (CIGS) that are more efficient than many rivaling CIGS thin film companies. But it was running out of money and needed to expand its production and attract customers. CEO John Carrington joined MiaSole late last year, and he made a public appeal in December for investors and partners who could bring money and sales and marketing expertise.

Hanergy may not be a well-known company in the U.S., but it’s large renewable energy producer in China. We pointed out in this post back in June that Hanergy is a company worth watching not only because of its large hydropower and solar panel production plants in China, but also because of its involvement in installing solar energy equipment. Hanergy won a 3-year deal to install solar panels on Ikea’s stores in China. The company also has built a wind energy generation business within China.

With the purchase of MiaSole, Hanergy is knitting together a global solar thin film empire. Last week, the company completed the purchase of CIGS thin film maker Solibro from Q-Cells in Germany. Hanergy said it would increase Solibro’s production for the European market. With MiaSole’s purchase, Hanergy, of course, will have a CIGS thin film manufacturing base in the U.S.

Solar startups have been picked off one by one cheaply – or filed for bankruptcy – over the past 19 months because the global solar market has been plagued by a glut of solar panels. The fast-falling panel prices – roughly 50 percent in 2011 alone and 30 percent so far this year – have put an enormous pressure on companies to lower their prices. That pressure is particularly difficult to handle for startups, which often have higher manufacturing costs initially when they are scaling up production of their technology. And many of them indeed were trying to raise more money and make that leap to mass production when the financial market crisis hit in late 2008, followed by the oversupply of solar panels starting in 2011.

One of the remaining CIGS thin film companies from Silicon Valley, SoloPower, hopes to reverse the trend. The company inaugurated its first large factory in Portland, Ore., last week and plans to start making use of a $197 million federal loan guarantee to expand production.

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The Silicon Valley company will officially mark the start of a 100 MW factory in Portland, Ore., on Thursday, its first commercial-size plant. The move is a big milestone for the venture-backed company because it will finally be able to produce its technology in high volumes, a must for any manufacturer to grab any significant market shares.

SoloPower’s CEO, Tim Harris, told us he has more orders than he will be able to fill in the near term, and he’s expecting to make a profit starting next year. “We are anxious to get this line started,” Harris said.

He won’t be the only one feeling anxious. SoloPower’s investors, such as Hudson Clean Energy Partners and Crosslink Capital, have collectively poured over $200 million into the company, and they’re still waiting for their pay day. Solar manufacturing is no longer the darling investment sector that it used to be, especially not since Solyndra failed spectacularly a year ago after accumulating over $1 billion in private equity and using nearly all of a $535 million federal loan guarantee to build a factory in California.

SoloPower is jumping into the market at a time when there remains a glut of solar panels and prices for them continue to fall quickly. Several dozen manufacturers in the U.S., Europe and Asia have filed for bankruptcies or shuttered factories in the past twenty-one months. Trade complaints have popped up in the U.S. and Europe against Chinese companies, which rose to prominence in the past five years with their huge factories and hefty financial help from their government. The complaints allege that Chinese companies have received government subsidies that give them unfair advantages and that they have sold goods at below cost.

SoloPower makes ultra-thin solar panels that use copper, indium, gallium and selenium (CIGS) to convert sunlight into electricity. The technology belongs to a newer class of solar technology that has now been made infamous by Solyndra’s demise. It hasn’t helped that other CIGS startups also have had a hard time making the leap into mass production and needed rescuing from investors.

Unlike some of its brethrens, however, SoloPower is rolling out panels that aren’t encased in glass. Instead, its panels are made up of solar cells laid out on a sheet of stainless steel and can be laminated on to glue to roofing materials. It’s a design that targets commercial and industrial rooftops, particularly those that can’t support the weight of an array of glass-covered panels. It also should lower the cost of using and installing mounting equipment to support and stabilize solar panels.

SoloPower’s solar panel booth

Those advantages allow SoloPower to charge a bit more for its solar panels without increasing the cost of a project, Harris said. He declined to disclose the company’s production cost or panel pricing.

Although the factory will start with an annual production capacity of 100 MW, it will start making that many solar panels right away. As with any solar manufacturing operation, SoloPower will gradually increase production and trouble-shoot any problems with its equipment and process along the way. Harris expects the company’s production rate to reach 20 MW – maybe 30 MW — per year by the end of 2012. The company will likely ship 2 to 5MW of solar panels during the fourth quarter, he said. It should ramp up to a full-scale production by the end of next year.

Getting that first line up and running will be important for giving SoloPower access to a $197 million federal loan guarantee to help build the remaining 300 MW at the same site. The goal is to complete the entire 400 MW factory in 2014. The total cost of building the entire 400MW factory will be about $350 million. SoloPower appears to have signed more stringent terms for securing the loan guarantee than Solyndra. Harris said his company likely underwent a lot more scrutiny because it cinched the loan guarantee much later than Solyndra did.

Solyndra obtained the loan guarantee agreement in September 2009 while SoloPower finalized its deal in August 2011. If SoloPower is able to complete the factory project and hit its sales and profit goals, then it will  become a role model and will have achieved something that Solyndra couldn’t pull off.

Given how competitive the solar market has become, SoloPower is working on lining up investors — or joint venture partners –- who can sell and distribute its flexible thin films in regional markets. Harris cited Italy, Japan and Korea – he recently visited customers in Seoul, he said — as among the promising markets.

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Miasole makes a type of next-generation solar panel technology that uses the combo of materials, copper, indium, gallium and selenium (CIGS), to convert sunlight into electricity. A group of these companies have raised billions of dollars to create this technology, and many of them are now suffering layoffs and even bankruptcies (the most famous of these is Solyndra).

Miasole had been struggling to survive in a solar market that has seen many large manufacturers shutter factories over the past year. The price of silicon (the main component in traditional solar panels) has plummeted and because of Chinese government subsidies, there is an oversupply of cheap solar panels. This environment has delivered a lethal blow to some of these CIGS firms.

Miasole said a couple months ago that it had raised $55 million to help it enter new markets and boost its sales staff, while it works on lining up more investors and partners in order to truly scale up its operation. In the announcement yesterday Miasole said it is continuing “strategic discussions with potential partners,” to try to ensure its long-term success, and that is is now focusing on cost cutting.

The company needs a white knight, or acquirer, to come to its rescue. In recent months Asian giants have played this role in cleantech. SK Group has backed Heliovolt, which makes a similar technology to Miasole, and Chinese auto giant Wanxiang has invested in A123 Systems, Smith Electric Vehicles and GreatPoint Energy.

Miasole’s CEO John Carrington says in the release:

The company is looking forward to aligning with a partner and collectively executing on our technology roadmap, flexible product launch and additional capacity to fulfill our 1GW+ commercial pipeline. I am confident based on current discussions we will finalize a partnership within the next 60-90 days.”

Miasole’s investors include Kleiner Perkins Caufield Byers, VantagePoint Venture Partners, Bessemer Venture Partners, Firelake Capital and Passport Capital.

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The latest is one is a 12.4 kilowatt system for utility Austin Energy, which is touting a “shop locally” mantra by installing a solar project with panels from its neighbor. The project is part of a pilot program by Austin Energy to lease rooftop space from businesses and nonprofit organizations for solar installations. Before that, last fall, HelioVolt talked about a 23 kilowatt installation at Texas A&M University.

Beyond that HelioVolt has yet to announce any big sales deals, at least not in recent years. HelioVolt seemed to be terminally ill when it announced last September that it had managed to line up an equity investment of $50 million from SK Group (the $50 million was part of an $85 million round).

HelioVolt’s founder, BJ Stanbery, told us then that the Korean investment will enable HelioVolt to improve its manufacturing technology and expand production beyond the small-scale 20 MW factory at its headquarters in Austin. One of HelioVolt’s investors, New Enterprise Associates, told Dow Jones that HelioVolt could be building its first large-scale factory in Korea.

The company, which has raised over $200 million since its inception, has stayed fairly quiet since then. In June, it announced the offering of a new set of solar panels.

How long that $85 million will last for HelioVolt and whether it will be able to compete at a time when solar panel prices have crashed remain to be seen. We’ve put in a call to HelioVolt to find out whether it might still be building a factory in Korea, and we will update the post if we hear back.

UPDATE: HelioVolt’s vice president of business operations, John Prater, told us that the company and SK are still actively planning that commercial-size factory, but the decisions on the location and size haven’t been made. ”We are thrilled to have SK on board, and (SK’s involvement) eliminates a lot of uncertainties,” Prater said.

Lining up a big investor can really help a startup survive tough market conditions. MiaSole, another thin film startup, is looking for that financial rescue and hopes to announce something there within 90 days. But in the meantime, the company is laying off people in its manufacturing operation, the company said yesterday. MiaSole, located in the Silicon Valley, declined to disclose how many people are leaving.

HelioVolt’s solar panels use an ultra-thin layer of copper-indium-gallium-selenide for converting sunlight into electricity. The majority of the solar panels on the market today use a much thicker layer of silicon instead. HelioVolt is one of the startups that sought to use alternatives to silicon to make cheaper solar panels that use less materials. These companies attracted billions of dollars in venture capital because they promised to deliver low-cost solar panels at a time silicon was super expensive.

The price of silicon has dropped by over 10 fold since the mid-2000s. Meanwhile, silicon solar panel makers, particularly those from China, have built massive factories to reduce manufacturing costs and grab market share in ways that startups with limited funds just can’t compete effectively. Startups such as Solyndra and Abound Solar have gone bankrupt.

Even large companies with lots of money have had a hard time competing. GE recently suspended its plan to build a 400 MW factory to make cadmium-telluride solar panels.

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The new equity round, according to a Securities and Exchange filing from last month, followed the $23.47 million round that the Silicon Valley company raised last summer. Solexant, which set out to make solar cells by depositing cadmium-telluride nanocrystals on rolls of metal foil, hasn’t said much about what it’s been up to since a new CEO, Brad Mattson, took over last year. We briefly caught up with one of Solexant’s board members, Cynthia Ringo, a managing partner at DBL Investors, on Wednesday. Ringo confirmed the new funding and said the company is sorting through options on how to bring its technology to market.

The company was supposed to build its first commercial factory, a 100MW project, in Oregon. The state announced a $25 million loan and $18.75 million in tax credits for the factory, to be located in Gresham, in 2010. But the company missed technical milestones and didn’t take some necessary financial steps to start using the loan, a state official told the Oregonian last July.

Ringo wouldn’t comment on what Solexant plans to do with the new $30,000 million round yet, and said, “It doesn’t behoove us to talk about a lot now because we are not selling in the market right now.” She referred questions to CEO Mattson, and we will update the post if we hear back from Mattson.

Solexant’s technology is based on research from the Lawrence Berkeley National Laboratory. The company was founded in 2006, when the price of silicon was expensive and investors were pumping lots of money into startups that were investigating alternative and cheaper materials for converting sunlight into electricity. Cadmium-telluride and copper-indium-gallium-selenide (CIGS) became two popular choices.

The success of First Solar has made cadmium-telluride an attractive choice, and many startups have hoped to become an alternative source of supply for cadmium-telluride solar panels. But none has taken off in the market as quickly as anticipated. Abound Solar, after securing a $400 million federal loan last year to add production, announced a suspension of production and layoffs so that it could modify the factory equipment to roll out a new product. Meanwhile, GE has announced a 400MW factory to take on First Solar, and the energy giant’s entry doesn’t bode well for smaller players who don’t have the same financial muscle and production scale.

I caught a presentation by Solexant’s co-founder and previous CEO, Damoder Reddy, at a Dow Jones conference in December 2009. Back then, the company had completed a 2 MW pilot line and raised $22.5 million. It then raised at least a $41.5 million round in 2010.

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The Silicon Valley startup, backed by big VC firms such as Kleiner Perkins and VantagePoint Venture Partners, has been an interesting company to watch because it’s part of a tribe of solar startups that collectively have raised billions of dollars and stumbled along the way to commercialize a type of solar panel technology that uses the combo of materials, copper, indium, gallium and selenium (CIGS), to convert sunlight into electricity.

MiaSole declined to disclose how much venture capital it has raised since its inception in 2001, but published reports put the figure at somewhere between $400 million and $500 million before the latest round. The latest equity round came from primarily existing investors, said CEO John Carrington.

CIGS technology drew a lot of interest a couple years ago when silicon, which is found in most of the solar panels today, was expensive and commanded several hundred dollars per kilogram. CIGS solar panels are also called thin films because they use a thin layer of semiconductors to produce power, which is an approach that should cut material costs. But over production has since depressed the price of silicon price so much that nowadays it’s fetching below $30 per kilogram, reported Bloomberg recently. In addition, an oversupply of solar panels over the past year has forced many companies, from startups such as Solyndra to major players such as First Solar, to go bankrupt or shrink their operations significantly.

MiaSole and many fellow startup solar manufactures are trying to scale up production and cut costs during this difficult time. That means some of them need to roll out new and better products sooner than initially planned, or they need more money to build factories at a scale that makes it possible to significantly cut costs. Many investors of these startups have been willing to fork over money in the past year to keep the companies going while they re-worked long-term strategies. Nanosolar announced the arrival of a new CEO and a $20 million round since the start of this year. AQT Solar said it’s now working on a different type of thin film technology than CIGS.

Growing up

MiaSole has run into its fair share of technical development and other difficulties as it evolves from the R&D mode to mass production. It brought in Joseph Laia as its chief executive in 2007 to push its technology development – namely to figure out the right process to make more efficient thin films. It brought in experts from manufacturing giant Intel last year to improve the efficiency of manufacturing operations, such as tweaking equipment maintenance schedules and work shifts (the Intel experts are still around, Carrington said).

The company seemed to have finally nailed the manufacturing part of its operation, and it brought in Carrington, who was in charge of sales and marketing at First Solar, last November to go out and fight for customers’ attention. MiaSole is now making solar panels at an average efficiency of 14 percent, which is higher than what its rivals such as Nanosolar, Stion, HelioVolt and Solar Frontier, which stands out as the largest CIGS solar manufacture thanks to its new 900 MW factory.

MiaSole expects the average efficiency of its panels to hit 15 percent later this year, and at 14-15 percent, the startup’s solar panels are entering the efficiency territories of silicon solar panels out there. That means if it can sell its panels for less, than it’ll be a break out player. Prices for silicon solar panels have fallen to around $1 per watt over the past 12 months, though that price point has come largely because of the oversupply problem and is causing solar manufacturers to lose money. MiaSole’s production cost should hit $0.80 per watt sometime this year, Carrington said.

Still searching

The startup has been making solar panels by sandwiching CIGS thin films between glass, which protects CIGS from moisture and other environmental damage. This type of design is common in solar panels you see on rooftops today. MiaSole plans to start shipping thin films using other flexible materials for protecting the CIGS layer. These flexible thin films will be especially attractive for rooftops that can’t bear a lot of weight, and the company wants to sell the thin films to roofing companies.

What could stop MiaSole from growing as quickly as it wants is if it isn’t able to line up more investors or partners who not only can provide money but who have the deep sales and marketing experience to help MiaSole broaden its market reach. Carrington made a public appeal for these partners last December. The startup has 150 MW of annual production capacity (over 55 MW of MiaSole panels have been installed worldwide), and it won’t be able to grow much beyond that if it doesn’t find the right dance partner.

“I’m convinced that we will have a partnership done this year,” Carrington said. “I want a strategy similar to First Solar’s — I want to make sure we align with the strongest partners.”

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The gallium-arsenide compound is more efficient at converting sunlight into electricity than the more common semiconductors found in today’s solar panels, such as silicon, cadmium-telluride or copper-indium-gallium-arsenide (CIGS). But gallium-arsenide also is much more expensive and commonly used sparingly as one of several ingredients for solar cells.

Alta’s simulation and field data show that its solar cells can produce two to three times more electricity over a one-year period than those available on the market today, Norris said. The company broke the world record for gallium-arsenide solar cells last year with a 28.2 percent cell last year.

Experimental cells like that are typically made in labs and demonstrate what a company might be able to achieve after it starts to mass-produce them. Whether a company will ever do so will depend on factors such as its ability to raise money and operate factory equipment efficiently, and these hurdles have tripped up many venture-backed CIGS startups.

Earlier this month, Alta announced it was able to produce a solar panel with 23.5 percent efficiency. When solar cells are selected and assembled into a panel, there tends to be a small loss of efficiency. That’s why cell efficiency figures tend to be higher than panel efficiencies. The most efficient solar panels sold today are the 20 percent panels launched by SunPower last year.

While gallium-arsenide cells are more efficient and should fetch higher prices, they won’t attract many buyers if they are too expensive and require project developers to make a substantial upfront investment.

Alta’s secret sauce

Alta’s technology for cutting production costs focuses on creating ultra thin, 1-micron gallium-arsenide solar cells that are grown on re-usable gallium-arsenide wafers, Norris said. Using the same compound for the cell and wafer ensures that the crystalline structure of the two match, which minimizes defects and leads to more efficient cells than using materials with mismatched crystalline structures.

To slice off that top layer without damaging it, Alta creates an intermediate layer between the two, using aluminum arsenide. Aluminum arsenide has virtually the same crystalline structure as gallium-arsenide, making it a good substitute. Alta harvests that top layer to make solar cells by etching away the intermediate, aluminum-arsenide layer, Norris said. After that, the wafer at the bottom is re-used to grow more cells. The wafers, at $100 each,  are good to be used repeatedly as long as they don’t break.

Many research labs know how to grow and slice off the top layer in tiny pieces. “The trick is to do it on large pieces and make it possible to do it at scale,” Norris said of Alta’s challenge to commercialize the technology.

Alta wants to make cells and sell them to customers who will use them for making either conventional solar panels or other devices such as roofing materials. In fact, Alta is working with one of its investors, Dow Chemical, on a federally-funded project to embed solar cells in building materials. Dow already is selling solar shingles containing CIGS solar cells.

The startup has raised about $120 million since its inception in 2007, and it’s building the pilot line that will be able to produce a few megawatts of solar cells per year, Norris said. With an undisclosed equipment supplier, Alta has designed three key pieces of equipment for slicing off the top gallium-arsenide layer for making solar cells. The rest of the factory tools will be more or less off-the-shelf.  Commercial shipment should take place by the end of 2013.

Check out photos from our factory tour:

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