On Monday, KiOR, which was largely funded by Khosla Ventures before it went public, announced in its fourth quarter and annual year 2012 earnings that it has now shipped its first cellulosic diesel product from its factory in Columbus, Mississippi. The factory, which could make some 3 to 5 million gallons this year, converts wood chips into a diesel fuel that the company says can be used in current fossil fuel infrastructure.

Last week startup ZeaChem said that it started production of cellulosic chemicals and ethanol at a demonstration factory in Boardman, Oregon, which can produce about 250,000 gallons per year. Late last year, ag giant DuPont started construction on a cellulosic ethanol factory in Nevada, Iowa, which when completed in 2014 could produce 30 million gallons of fuel from corn stalks and leaves. For comparison sake, these are very small volumes in the grand scheme of the fossil fuel industry — the U.S. consumes some hundreds of billions of gallons of gas per year.

Regardless, these are signs of progress for an industry that has perpetually missed milestones and overestimated the amount of time it would take to move into commercial production. But these milestones are still steps on the way to a company producing these advanced biofuels at a scale and cost that is competitive with gasoline.

According to Bloomberg’s energy research arm New Energy Finance, ethanol made from plant waste could cost the same to produce as corn-based ethanol by 2016. Currently cellulosic ethanol costs 94 cents a liter to produce, or about 40 percent more than ethanol made from corn, says Bloomberg.

Despite these milestones, there are many more steps ahead. KiOR was expecting to ship its first cellulosic diesel late last year, and in the company’s earnings call CEO Fred Cannon apologized to investors for missing that target due to “unexpected startup issues.” KiOR also now needs to operate that factory at a steady state for another 9 months, and also buildout another factory in Natchez, Mississippi, which is supposed to produce three times what its Columbus facility will produce.

KiOR needs to finance the Natchez facility, and on that note, said on Monday that Khosla Ventures is willing to offer it another $50 million commitment and amend its previous loan agreement. ZeaChem is also looking to buildout a 25 million gallon factory per year next to its demonstration factory. DuPont is one of the company’s with the deepest pockets that is moving ahead and has been working on next-gen biofuels for a decade. Still, the process has taken DuPont longer than it had expected, the CEO told me recently.

But not everyone thinks building large biofuel factories is a smart move. Late last year oil giant BP cancelled its plans to build a next-gen biofuel factory in the U.S.

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That’s the whole idea of the ARPA-E program — the small grants are given to high-risk early-stage projects that have the potential to make a big impact, but are likely too early for private investors to support. At the end of the day that means that most of the projects won’t succeed, or as New York Mayor Michael Bloomberg said in a speech on the final morning: probability says most of these projects will flop. But in a year when other forms of government funding, and venture capital funding are drying, up ARPA-E is still giving big energy ideas a glimmer of hope.

As Bill Gates once said: we need crazy energy entrepreneurs. And they were there in full force at the ARPA-E Summit. Here are 5 projects I checked out this week:

1). A breakthrough ultracapacitor: Tesla CEO Elon Musk once said he thought ultracapacitors would one day supercede batteries in electric cars. Ultracapacitors store energy in an electric field, rather than in a chemical reaction, and can survive hundreds of thousands more charge and discharge cycles than a battery can, and can also deliver high bursts of power. ARPA-E grant winner FastCAP makes an ultracapacitor that uses carbon nanotubes to increase the surface area of the electrode — the more surface area of the electrode the more energy can be stored. FastCAP says its ultracapacitor has 5 to 10 times higher energy density than commercial ultracapacitors.

During the ARPA-E Summit showcase FastCAP Director of Operations Jamie Beard told me that an early application that its ultracapacitors are being used for is oil, gas and geothermal drilling. Because the ultracapacitors can be used at very high temperatures they can be used down in deep wells where the temperatures are high and the power needs are high, too. Drill operators don’t want to use standard batteries for this because batteries can catch on fire and explode under high temperatures. Beard says that FastCAP’s ultracapacitors can operate safely between -40 degrees C to 150 degrees C.

FastCAP is backed by the Chesonis Family Foundation, the Massachusetts Clean Energy Center, and angel investors. The company has 30 or so people, a 18,000 foot factory in Boston, and a 40-foot-long custom-built pilot line for making its ultracaps.

2). A natural gas tank that works like an intestine: Saul Griffith’s Otherlab is working on a natural gas tank for vehicles that uses small tubes that can conform to the shape of the vehicle. Mimicking how an intestine has boosted capacity in the body, the tubes of the natural gas tank could have maximum storage capacity. Otherlab’s Tucker Gilman pitched the intestinal natural gas tank to investors on the opening night of the Summit. ARPA-E gave the project a $250,000 grant.

3). The waste annihilating molten salt nuclear reactor: This nuclear project isn’t backed by ARPA-E, but Transatomic Power co-founder and CEO Russ Wilcox pitched the technology to investors at the beginning of the summit. Transatomic is designing a new type of nuclear reactor that can run off of nuclear waste and also produce significantly less waste than the traditional lightwater nuclear reactor. Wilcox is the former CEO and co-founder of display-maker E Ink.

Two other Transatomic co-founders are Leslie Dewan and Mark Massie (shown in the video) who are both PhD students at MIT’s nuclear engineering department. Transatomic also counts advisors Todd Allen, Director for the Advanced Test Reactor National Scientific User Facility at Idaho National Laboratory, Michael Corradini, president of the American Nuclear society, and Regis Matzie, who was the former CTO for Westinghouse. Kleiner Perkins’ David Wells gave the company the feedback that while the company and executives are impressive, the project is “out of the range of the VC funding model.”

4). Tweaking E.Coli to solve our problems: Founded in 2007 by synthetic biologist Yasuo Yoshikuni, Bio Architecture Lab uses synthetic biology and enzyme design to convert seaweed into biochemicals and biofuels. It’s tweaked E.coli to be able to turn kelp into fuel. The company received an ARPA-E grant in 2010 to work on a project with DuPont to turn seaweed into isobutanol. DuPont is actively looking to partner with startups in various areas — check out my interview with DuPont’s CEO Ellen Kullman.

Ginko Bioworks is another startup that is focused on using synthetic biology to tweak E.coli — it’s developed a strain of E.coli that can directly use carbon dioxide to produce biofuels. Ginko Bioworks researcher Jason Kelly told me during the Summit that the company doesn’t plan on doing any production of the actual fuel and compared the startup to “biological software developers.”

5). Magnetic algae – say what?: There’s a type of bacteria in the soil that have cells filled with magnetic crystals, and this enables the bacteria to move along magnetic fields. Yeah, that’s pretty weird on its own. But researchers at Los Alamos National Labs are genetically engineering a gene in these bacteria and placing it in algae, creating magnetic algae which can be manipulated using magnets. The technology could theoretically be used in algae biofuel production and fuel use.

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DuPont, which has a market cap of $44 billion, “is not an energy company, it’s a science company,” Kullman reminded the audience. But with its industrial material products, high-yield agriculture strains, and bio-based chemicals, DuPont is a major supplier of materials for solar manufacturers, and is building a ground-breaking cellulosic ethanol plant in Iowa. “No industry needs innovation more than energy,” said Kullman.

Following Kullman’s remarks, we sat down with the 57-year-old, who is DuPont’s first female CEO, to ask her about working with startups, how they’ll overcome the hurdles of biofuels, and just how bullish she is on solar. The following is an edited interview:

How can startups work with DuPont? What are you guys looking for?

It depends on the area. We work with a lot of startups and small companies and we do a lot of collaboration. We’ve long transitioned to a belief that our ideas aren’t the only great ones out there and we are openly looking to collaborate — we call it inclusive innovation. Some of the problem’s we’re facing are so complex that you can get there faster and smarter if you do it with others that have skill sets that align with where we’re going or with what we need.

We’ve been working with Genencor, a Palo Alto startup, since the 90’s and the idea was to use agriculture to create industrial materials and fibers. We had certain parts of it and they had other parts of it.

There can be great synergy, but you have to get really specific. We tried before to paint the world with a large partnership with a university or a company without that definition and it doesn’t really go anywhere. A lot of times we think we know what we want, and when we engage we find out that there’s a whole other side of this that they [the startup] can bring that we hadn’t really comprehended before.

We bought Innovalight, which is helping us from the standpoint of silicon inks for solar photovoltaics. We don’t buy them all, right? The relationship is really dependent on the needs of each company and can span a contract to a JV to a purchase or a minority equity investment. The more inflexible we are the less successful we’re going to be.

Is there a strategy for acquiring startups? The reason I ask is because it seems like a lot of the IT and web ecosystem has been built around companies like Cisco or Google aggressively acquiring startups, but the science sectors don’t seem to have this kind of acquisition ecosystem.

It has to be, to what end. You want to put out real money and the question is how will it create value for our shareholders? So it tends to be very specific to an area. Like the solar area we might be looking broadly at novel materials, or novel processes, that we can bring in that can enhance our position. So it’s not a strategy to acquire, but an open strategy to create the strongest future whether its acquisition or JV or licensing. It’s about creating shareholder value. Areas that we’re very active in is agriculture, nutrition, and industrial biosciences and advanced materials.

A lot of people, including myself, are watching the ground-breaking of the cellulosic ethanol plant in Iowa with great interest. But many companies have tried to do this and have struggled. Why will DuPont succeed in this area when others have not?

We’ve been working at this for awhile — a decade. We had very specific milestones we had to meet from a tech standpoint and a scale up standpoint. We had a 150,000 gallon plant that had to meet certain criteria before we would go to the next step. This was the second major project we did from that standpoint. The first was the Bio-PDO that goes into fibers and carpets. We had an understanding and a lot of experience that told us we could get this done. But we don’t start putting a shovel in the ground until the milestones are met.

We already have the relationships with the farmers in the communities that will provide the raw materials for the plant. And we understand how much it’s going to cost to collect and store, and that’s all part of the economics. I was really impressed with the work that the team did in laying that all out five years ago. I think we have a much better shot at being successful because we have all of these areas moving at the same time. We keep building on our learnings from previous projects and it’s helping us do it faster and understand what we need from others and I think it’s going to create a huge potential for success.

Has the process of moving the cellulosic ethanol plant along taken longer than expected?

It’s never short enough for me. They [her executive team] would probably tell you that it exceeded their expectations. It’s this tug of war.

DuPont is a major supplier for materials and that makes it susceptible to the vulnerabilities of the solar cell and panel market right now. Are you still as bullish on the solar materials sector as the $2 billion DuPont was planning on selling for 2014?

I think we’re bullish on solar PV. We believe that the progress that has been made around efficiency has been tremendous in the last few years. I remember thinking when crystalline silicon got to 12 percent efficiency that it was impressive and now they’re pushing 20 [percent].

I think that materials matter. It’s not only the efficiency of the cell when it starts, it’s the efficiency 25 years later. So weatherization, things like that, become very important and materials matter in that.

I think we’ll get there. I think we’ll get to parity on average in 2015. If you look at what China’s announced for their 5 year plan to install 21 GW is helping right.

But I think it’s going to be bumpy. Any new technology transition is bumpy. And you’ve just got to be able to put it in perspective for those bumps. How much we sell in 2014, or 2015, will depend on how many modules are built, right? But I think the science is there and we just have to continue to make the progress.

What would you want to see from the government in the energy and clean power sectors?

Stable government policy. I think stability around that is very important. Consistent government policy is a really important part of a secure and a more diverse energy future.

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An LS9 spokesperson, as well as company investors, told me on Wednesday that the company is not shutting down. An article in Biofuels Digest on Wednesday reported that LS9 has been struggling, would soon see its staff disperse and could shut down. That article has now been changed to reflect the switch in leadership and de-emphasize the previous assertion that it could shut down.

No doubt it’s a difficult environment for biofuel startups right now. Finding venture capitalists to put more money into capital intensive biofuel production was hard in 2012, and will likely be equally hard in 2013.

Ls9 restructured its business in the fourth quarter of 2012, which led to a reduction in staff, said a company spokesperson. But the company is moving forward with its current size, says the spokesperson. The company would not release the number of its employees or the amount of staff reduced. LS9 started up a demonstration facility in Florida in late 2012, and opened an office in Sao Paulo, Brazil in the Summer of 2011.

LS9 uses a genetically modified version of e.coli bacteria to make diesel and other green chemicals and fuels. LS9 has raised at least $75 million from venture capitalists including Flagship Ventures, Khosla Ventures, Lightspeed Ventures, Chevron Technology Ventures, and BlackRock.

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Hanergy is a large renewable energy producer in China and runs 6 GW of hydropower plants and employs 5,000 people worldwide. It also claims to have factories that can produce 2 GW of solar panels per year. It built two factories with 300 MW of capacity each in 2011.

Hanergy made its move into the U.S. market when it set up an office south of San Francisco in 2010.  The company also has built a wind energy generation business within China.

What is intriguing about the privately held Hanergy, aside from its buildup of a massive production capability at a time when the world market is plagued by a glut of solar panels, is its pursuit of thin film solar technology. The company makes amorphous-silicon based thin film panels, a type of technology that fell out of favor in the U.S. and Europe when several venture-backed startups working on it went out of business or still struggle to make it work.

Amorphous-silicon thin film technology promises to deliver low-cost solar panels with an ultra thin layer of cells. But the costs of buying equipment and starting production can be quite high, and reducing those costs during mass production often takes longer than expected (this issue isn’t unique to amorphous-silicon thin films but applies to new solar technologies in general). Amorphous-silicon solar thin films also tend to be less efficient at converting sunlight into electricity than technologies that use other semiconductors, such as silicon or copper-indium-gallium-selenide.

Manufacturers can sell lower-efficiency panels as long as they price them lower than the competing but higher-efficient panels. But accomplishing that has proven difficult when, in addition to dealing with high start-up production costs, you have to compete with technologies that are producing cheaper and cheaper solar panels as well.

Amorphous-silicon technology is still alive and may even be doing well in Asia, where there remains a number of manufacturers. DuPont, which has an amorphous silicon thin film factory in China, announced Wednesday that it will sell 22.75 MW of the thin films for two projects in Thailand.

In a write-up dated mid-2010, Hanergy said it was building a factory to make amorphous silicon solar panels (with an added microcrystalline layer) that could covert 9.5 percent of the sunlight that falls on them into electricity. Other thin film technologies had efficiencies a few percentage points higher than that back then, and panels made with much thicker silicon cells had efficiencies mostly in the mid-teens.

Hanergy remains a big believer in thin film technology and last week announced it was going to buy Solibro, a German company that makes solar panels using copper-indium-gallium-selenide cells. Solibro’s owner, Q-Cells, filed for bankruptcy a few months back.

Hanergy doesn’t just want to produce solar panels, it also wants to build solar power projects. That is one of its goals for the U.S. market, and it could benefit from the current trade case against imported Chinese silicon solar cells. However, the project development and construction business is a completely different playground that doesn’t easily accommodate new comers, even those armed with massive factories.

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When thinking about the rising price of oil, folks in cleantech tend to think in terms of transportation fuels and what can be done to replace them with renewable and clean sources of energy. And with good analysis from the likes of UCSD’s Tom Murphy showing that in 2004 oil production slowed and failed to increase much despite prices tripling, finding alternative fuels is key. But what most people don’t realize is that a chunk of the crude oil that goes into an oil refinery doesn’t end up anywhere near a car’s fuel tank. It ends up making chemicals.

A higher margin product

In 2011, the global market for petrochemicals was worth over $3 trillion, approximately the size of the entire U.S. government’s budget, and the feedstock for producing those chemicals is petroleum. About half of that market is commodity chemicals that are low margin, but the other half is higher margin specialty chemicals like polymers that comprise plastics or substrates for pharmaceutical manufacturing.

The biofuels industry is working on producing transportation fuels through a process whereby a carbon feedstock like woodchips or sawgrass is fed to microbes to produce oil. But most of the biofuels companies that IPO’ed last year have been crushed in the market, and Amyris recently decided to scale back its biofuels production in favor of, what else, but manufacturing the specialty (and higher margin) chemical squalene.

So as some biofuels companies try to pivot toward specialty chemicals, which are lower volume and smaller market but with better margins, it’s worth taking a look at the potential to use microbes to manufacture chemicals from a feedstock other than oil.

Finding the right bio-chemical

I recently caught up with Charles Eggert, the CEO of Boulder, CO based OPX Biotechnologies, a bio-chemical startup that has raised $65 million from a number of VCs including energy focused Altira Group and cleantech friendly Mohr Davidow. OPX Bio is targeting the $10 billion global market for petro-acrylic, an ingredient in everything from paint to diapers, by generating the first biologically produced acrylic, so called “bio-acrylic.”

Eggert is unsurprisingly bullish on the bio-chemical market. He points out that while less of the oil going into a refinery comes out a petrochemical than comes out a fuel, petrochemicals have much greater value in the market. Specialty chemicals have disproportionate margins and value, which is what makes them attractive. He also takes some solace in the fact that the massive scaling issues that have hampered biofuels are somewhat less of an issue for lower volume specialty chemicals and that many common chemicals from pharmaceuticals to amino acids are already produced biologically.

On the cleantech end, biochemicals are renewable, presuming you can access a widely available feedstock whose growth doesn’t harm the environment and doesn’t compete with the food supply as corn based ethanol does. But more importantly the process of using microbes to produce biochemicals doesn’t require heat and pressure, which are both needed in petrochemical processing. The bacteria that OPX uses operates near room temperature.

Eggert says that producing bio-acrylic results in 75 percent less greenhouse gas emissions versus producing petro-acrylic. Additionally, large companies like Procter and Gamble have ambitious pledges, like targeting the replacement of 25 percent of all petroleum based materials with renewable materials by 2020. P&G is a significant buyer and seller of specialty chemicals for everything from detergents to cosmetics, and the option to buy greener bio based chemicals could be an attractive option.

For a feedstock, OPX is currently using sugar, either from corn or Brazilian sugar cane. But ultimately the industry will need a non-food based sugar, often referred to as cellulosic sugar, which is derived from biomass materials like switch grass or energy cane. Multiple companies, from BP to DuPont, are working on building large scale plants that can derive sugar from biomass sources.

Eggert told me that at commercial scale, making bio-acrylic is cost competitive with petro-acrylic. OPX will need to build a commercial scale plant and prove that it can get the same yield it’s produced at smaller scale, the critical scaling hurdle that every biochemical or biofuel company faces. It also has a joint development agreement with Dow Chemical, the largest U.S. producer of petroleum based acrylic, which Eggert reports is seeing demand from its customers for renewable biochemicals.

The building of a final production plant can often run a couple of hundred million dollars. “It’s not cheap,” says Eggert. “Which is why you need to make sure your process, your microbe, your engineering design are as efficient as they can possibly be.” And for the benefit of the biochemicals industry, let’s hope that the scaling goes faster and more smoothly than it’s gone for biofuels.

Images courtesy of OPX Biotechnologies and Amyris.

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BioAmber’s first product is succinic acid, which is a bio-based replacement for a petroleum-based substance used in food, pharmaceuticals, detergents and plastics. BioAmber is making this bio-succinic acid at a 350,000 liter fermenter in Pomacle, France (see image right) and has produced 487,000 pounds of the product,

BioAmber is building a facility in Sarnia, Ontario that will be able to produce 34,000 metrics tons of succinic acid, and 23,000 metric tons of another biochemical called bio-BDO. That facility is estimated to cost $200 million, including $74 million for the initial phase that will be completed in 2013.

The company has a deal with Mitsubishi Chemical Corporation for its bio-succinic acid, and Mitsui and its venture arm are also investors in the company.

But like most of the biochemical companies BioAmber isn’t producing much revenue and no profits. BioAmber lost $10.8 million for the six months ended June 30, 2011 and had accumulated a deficit of $22.6 million over that period.

BioAmber also licenses its technology from players like UT-Battelle and UChicago Argonne for the organism for its bio-succinic acid, Cargill for a yeast for its succinic acid, DuPont for catalysts for turning succinic acid into BDO, and Celexion for other technologies. Investors in the company include French venture capital firm Sofinnova Partners, private equity firm Naxos Capital Partners, Japanese giant Mitsui & Co. and its venture arm Mitsui & Co Venture Partners, and the Cliffton Group.

While biochemical and biofuel companies have managed to price their IPO’s decently, many the companies’ stocks have fallen considerably in recent months.

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“What we are seeing is less cleantech opportunities offered for consideration. It wasn’t as vibrant as it was a few years ago,” King said during an interview on Thursday at the California Cleantech Open, a business competition for startups.

Chevron Technology has invested nearly $200 million in 60 companies across sectors over time, with 36 of them in its current portfolio, King said. The portfolio now is made up of 50 percent in IT, 25 percent in cleantech, 20 percent in oil and gas, and 5 percent in others, he said.

There are more than a few reasons for the shift away from cleantech. One of them is the rise of natural gas, which is cheap and abundant now that new technology have been developed to extract gas from shale and new resources have been found over the past few years in the U.S. Chevron says it has been seeing new startup companies in the natural gas technology space.

At the same time, clean power – from solar to biofuels – remains uncompetitive and unprofitable, King said. Chevron is interested in solar, but is also seeing less need to make equity investments in solar technology because the tech is maturing and commoditizing. With solar panel prices coming down, Chevron is interested in deploying solar technologies rather than nurturing new startups.

Chevron’s solar projects

Chevron has been running technology demonstrations for a variety of solar technologies, including solar photovoltaic (solar panels), concentrating photovoltaic (using mirrors to focus light onto solar cells), and concentrating solar thermal technologies (a combo of concentrating mirrors and using the sun’s heat to produce steam, and then electricity).

Chevron unveiled its 740 KW Project Brightfield in early 2010 to test mostly thin film solar photovoltaic technologies from seven companies: Sharp, Abound Solar, MiaSole, Schuco, Solar Frontier, Solibro and Innovalight. Innovalight, unlike the others, makes silicon ink to apply to solar cells to boost the sunlight-to-electricity conversion (the company has since been bought by DuPont).

“Some worked very well, and some we found didn’t stand up to the real environment. They cracked,” said King, who declined to name the manufacturers who produced the faulty panels. Solar panels are supposed to last 20-25 years.

Chevron has no plan to stop running Project Brightfield, which is located in Bakersfield, Calif. It’s looking at building solar power projects but will likely do so overseas where energy prices are high, King said, and he named Indonesia and Hawaii as examples. The company doesn’t want to build solar farms to sell them or operate them while selling electricity to local utilities. Instead, it wants to build them for its own use, King said.

That philosophy is evident in the unveiling of a 29 MW project by BrightSource Energy near a Chevron oil field in central California earlier this week. BrightSource, which counts Chevron as an equity investor, built the solar thermal farm to produce steam, which is then shipped to the oil field to loosen up the sticky oil and make it easy to extract.

Chevron also is running a demonstration project for concentrating photovoltaic technology in New Mexico. The company built a 1 MW project earlier this year near its molybdenum mine in Questa, New Mexico, using technology from Soitec’s Concentrix division.

Images are of Chevron’s solar to steam farm in Coalinga, and of MiaSole’s factory.

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The test cell exceeds the previous record of 16.7 percent for a solar cell made of cadmium-telluride set by the National Renewable Energy Laboratory in 2001. The new record is critical not for bragging but for showing solar panels made with cadmium-telluride cells can have a longer presence in the market than previously expected.

Efficiency is correlated with how much power a panel of a given size can produce – more power means higher efficiencies. There is a fixed cost and amount of time for making each panel, and First Solar’s technology makes a panel in less than 2.5 hours. If the company produces each panel with a higher power rating (in watts), then that panel’s cost-per-watt is lower.

The Arizona company has been hailed as the lowest-cost solar panel manufacturer in the industry for some years now. Producing panels more cheaply than others is the key advantage for First Solar, especially when its solar panels aren’t as efficient as most others in the market. During the first quarter of this year, the company produced panels with 11.7 percent efficiency at $0.75 per watt.

Competition is intense

The majority of the solar panels sold today are made with silicon, and they generally have efficiencies a few percentage points above First Solar’s, which is not made with silicon. Although the silicon panels cost more to make, they also can command higher prices.

The most efficient silicon solar panel on the market today is the recently launched 20 percent panel made by SunPower. The SunPower panel contains cells that can do 22.4 percent efficiency. When cells are assembled into a panel, they don’t all perform the same, hence the lower panel efficiency figure. Plus, the panel efficiency includes the frame area where there are no cells.

SunPower and fellow silicon solar panel makers are eager to improve their products’ efficiencies as well, particularly given that silicon solar panel prices have fallen more than half in the past two years. In the last six weeks alone, the prices have fallen by 15 percent, according to IMS Research. The average price was close to $1.80 per watt in the first quarter of this year, and it’s reached below $1.40 per watt, IMS said.

Two big developments have caused the price to fall quickly: the declines of government subsidies in the world’s two largest markets, Germany and Italy, and the resulting piling up of solar panels because of the cut in demand. The cuts in subsidies, which are government-set solar power electricity prices that utilities must pay, have forced solar panel manufacturers and their component suppliers to lower how much they charge for their goods, or else their customers wouldn’t see any good profit in investing and building solar energy projects.

Solar panel makers have always known that they need to improve their products’ efficiencies. The quick price decline makes it more urgent for them to do it faster, if possible. Several large solar cell and panel makers have turned to technologies such as the silicon ink by Innovalight. The silicon ink has enabled Innovalight customers to boost their cells’ efficiencies by around 0.8 percentage point or more. That ability attracted the attention of DuPont, which just bought Innovalight for an undisclosed price.

Demonstrating that it can push the limits of efficiencies in cells made by its production equipment is important for First Solar to compete for many more years to come. Solar cell records are meant to show an achievable target, but they don’t convey how long it might take for the manufacturer to reach that efficiency at scale. Those records also refer to the best their holders can produce at a given time, not necessary what they can manufacture consistently in high volumes.

First Solar said it expects to boost the efficiency of its market-ready solar panels from 11.7 percent now to 13.5-14.5 percent by the end of 2014.

Photos courtesy of First Solar

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