But that doesn’t mean there aren’t bright spots on the horizon, and major opportunities for certain kinds of solar startups in 2013. Here’s our list of 13 solar startups to watch in 2013 — some may be under the radar, but all have managed to do one of the following recently: raise money, build factories, launch innovative products and services or otherwise make progress despite the hard times (or because of it).

1). Solar Mosaic: The company brings solar power investments to the masses with its recently launched public online site. Residents of California and New York (as well as accredited investors) can invest in any of the projects for as little as $25 and get what should be a steady, long-term return (of 4.5 percent for the first projects). The company sold out three projects less than 24 hours after the launch this week.

2). Alta Devices: Portable solar chargers could cut the number of batteries a soldier must carry onto the battle field and provide an alternative source of power for drones. Alta Devices is focusing on the military first with its highly efficient solar cells and hopes to use these contracts to scale up manufacturing, slash costs and eventually enter the more conventional solar market where much cheaper solar cells now dominate.

3). Clean Power Finance: The company raises funds to offer power purchase agreements or leases for solar panel installers to market and sell them to homeowners. The company also launched an energy credit trading service and assembled a database of local permitting rules in 2012 so that retail service providers could spend less time and money for figuring out the paperwork they need to do.

4). GlassPoint Solar: With its novel greenhouse design for its solar thermal energy equipment, GlassPoint Solar is targeting the oil industry with its solar steam production, which pries loose oil from wells for easier extraction. Oil companies are warming up to using solar energy to produce steam rather than natural gas, which remains expensive in regions such as the Middle East.

5). QBotix: The company uses robots that move along a tracking system and tilt solar panels during the day to follow the sun. GPS and wireless technology are used to detect problems and monitor the systems.

6). Genability: How do you show customers the amount of energy savings they could achieve or money they could make by going solar? You need accurate data on utility rates, and that’s what Genability specializes in. The startup collects and crunches electric rates — which change often — from utilities across the country. SunPower, SolarCity and SunEdison are customers.

7). Semprius: The prices of silicon solar cells have tumbled in recent years thanks to mega factories by manufacturers mostly in China. To compete, solar cell manufacturing startups must develop something much more efficient that can find other uses as well. Semprius, like Alta Devices, is achieving this by using gallium-arsenide for its cells, but it also is making the solar panels for housing them. The company raised $7.5 million and opened a small factory in North Carolina last year and is targeting the military as well.

8). Stion: After Solyndra’s bankruptcy in 2011, few venture capitalists wanted to invest in using copper, indium, gallium and selenium (CIGS) to make ultra-thin solar panels (that’s the same material Solyndra was working with). Many CIGS startups went out of business or got scooped up in firesales. Stion has survived so far after lining up investments in Taiwan and Korea, and it started shipments from its Mississippi factory last year.

9). SoloPower: The company is another CIGS startup that has made progress toward commercializing its technology while its peers disappeared into oblivion. SoloPower turned on its 100MW factory in Oregon last year and secured a federal loan guarantee to help it expand if it meets milestones.

10). SCS Renewables: As interest in investing in solar power generation grows, investors will want to know where they can find quality projects. SCS Renewables runs a match-making service that also helps developers to massage their projects into presentable shapes in front of banks and other investors.

11). Silevo: With a new type of hybrid solar cell technology and its first factory in China instead of the U.S., where it’s headquartered, Silevo has mapped out a plan to scale up production and keep production costs low enough to attract customers with its efficient cells. 

12). TenKsolar: Out there in Minneapolis, tenKsolar has designed a wave-like solar energy system that pair solar panels with separate panels that are lined with a reflective film to direct light to the solar cells. The unusual design caught the attention of Korean conglomerate Hanwha, which led a $15.5 million round in 2012.

13). OneRoof Energy: The startup teams up with roofers and electricians to sell rooftop solar systems and financing products such as leases as part of new roofing or re-roofing projects. OneRoof Energy is part of a group of solar installers, such as the now public SolarCity and high-profile startups Sungevity and SunRun.

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However, DowJones Venture Wire reports that in conjunction with the funding, Stion let go a “small number of people.” Cost cutting, to survive and scale, in the difficult solar market is an ongoing trend in 2012, no matter how big or small the company is.

Stion, founded in 2006, started commercial shipments of its thin film solar panels earlier this year. Stion spokesperson Frank Yang said in an email that with the $25 million in funding, Stion’s total equity funding is around $240 million.

Stion makes panels that use copper, indium, gallium and selenium (CIGS) instead of conventional silicon to convert sunlight into electricity. Other companies have struggled to scale up the manufacturing of panels that use the same materials to build solar panels, including HelioVolt, Miasole, Solyndra and Nanosolar. Stion has a Mississippi factory, which is supposed to eventually reach 500 MW of production capacity.

A year ago, Stion raised $130 million led by Korean investors – AVACO and Korean private equity funds — and the plan was to build a Korean factory and create a Korean subsidiary. Korean conglomerates seem to have the funds and interest to scale up these CIGS solar companies; Korean company SK Group also pumped $50 million into thin film solar company HelioVolt. Stion’s other investors include Khosla Ventures, Taiwan Semiconductor, Lightspeed Venture Partners, Braemar Energy Ventures, and General Catalyst Partners.

Image courtesy of Stion.

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The funding announcement came about a year after tenKsolar’s founder and president, Dallas Meyer, told us about the company’s plan to raise this B round. TenKsolar isn’t the first U.S. solar startup investment for Hanwha, which has put money into silicon wafer makers 1366 Technologies in Massachusetts and Crystal Solar in Silicon Valley (Crystal received $15 million). Hanwha also has invested $8 million in OneRoof Energy, a solar energy system installer in San Diego.

Hanwha’s investments reflect a strong interest by Korean companies to put money in U.S. solar technology startups, many of which have been starving for money as VCs in the U.S. shy away from making solar investments because solar manufacturers often requires a lot of money and time to bring their technologies to market. Stion, maker of copper-indium-gallium-selenide (CIGS) solar panels, counts seller of LCD panel factory equipment, AVACO, as an investor. HelioVolt, another CIGS solar company, lined up $50 million from SK Group last year.

TenKsolar, founded in 2008, strings together silicon solar cells in a panel in a way that minimizes a drop in electricity production for the entire panel due to shading (this can happen when cells are wired together in series). The company builds electronics into the back of the panel to monitor and adjust the power output of different groups of cells. It then pairs each panel with another panel lined with a reflective film that helps to capture more light. The company also sells the equipment for anchoring and propping up the panels.

“By using reflective light, we can add a fraction of the cost of the solar panel itself but have that much higher efficiency. That led us down the path on how to integrate the light,” Meyer told us last year. The reflector also concentrates the light so that tenKsolar can use fewer silicon cells in each panel to cut costs. With the reflector film, the panel efficiency could go up as much as 25 percent, Meyer said.

With the new funding, tenKsolar can expand its manufacturing and sales and take advantage of Hanwha’s expertise in the solar business. Hanwha spent $370 million for a nearly 50 percent stake in China-based silicon solar cell and panel maker Solarfun Power in 2010 (Solarfun has since been renamed Hanwha SolarOne). Hanwha’s solar business is called Hanwha Solar, which set up an office in the U.S. last year and recenly inaugurated a $14 million research and development center in Silicon Valley.

Part of the $15.5 million round for tenKSolar also came from ESB Novusmodus, a fund by Irish state utility ESB.

Photo courtesy of tenKsolar

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I was reminded of this tension when a SolarWorld executive asked me jokingly (or not) why the lanyard for my badge featured Suntech Power’s logo, and if I could be fair in my coverage if I was willing to wear that? As I looked around the conference, I saw a number of people sporting plain lanyards with no logos — I guess I should bring my own lanyard from now on.

Notwithstanding the controversy surrounding the trade dispute, the trade show offered an interesting look at prototype solar panels, robotic technology, marketing strategies and politics. Some solar companies highlighted how efficiently their solar cells and panels can convert sunlight into electricity. This marketing reflects the pressure manufacturers are under to boost those efficiency figures quickly because doing so cuts costs.

And given that where stuff is made carries a political overtone these days, it was not surprising to see companies such as Stion splashing the image of the American flag as the backdrop of its booth. On the other hand, Shinsung Solar Energy was proud to use “powered by Korea” as part of its slogan.

Here are some highlights from the trade show:

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India wants a lot of solar energy, and it’s getting a lot of financial help from the United States. The Export-Import Bank of the United States has provided a $3.7 million loan to a project developer to build a 2 MW project in India using MiaSole’s thin films, said bank spokesman Phil Cogan Wednesday.

The 10-year loan, which has a fixed interest rate of 3.8 percent, goes to Texas-based Universal Solar System, which said it expects to complete the 2 MW project in the state of Gujarat by the end of the year. The bank’s mission is to promote the export of American products, and it provides loans or loan guarantees to companies that buy and ship American goods abroad. It’s playing a significant role in financing renewable energy projects, and for solar in particular. The bank approved the loan during fiscal year 2011, which ended in September, Cogan said. The bank had previously announced six other projects totaling $176.4 million for India during fiscal year 2011.

India is a new market for American solar manufacturers. The Indian government launched a national solar plan in 2010 and plans to subsidize 20 GW of grid-tied solar by 2022. Gujarat also has its own incentive program that offers feed-in tariffs, which are government-set pricing that aims to guarantee a good return.  The national program uses a competitive bidding process instead.

MiaSole joins other solar panel maker such as First Solar, SolarWorld, Abound Solar and even the now bankrupt Solyndra as beneficiaries of the bank’s financial support. For example, the bank guaranteed a $10.3 million loan earlier this year from KBC Bank NV in Belgium to finance a project by a German company that bought 3 MW of Solyndra’s panels that sported an unusual design involving tubes that were lined with copper-indium-gallium-selenide cells.

MiaSole’s future

MiaSole, too, makes solar panels using layers of copper, indium, gallium and selenium, but its panels resemble conventional, flat plate design. The Silicon Valley startup underwent a management shake out recently when it announced the arrival of new CEO, John Carrington last month. Carrington hailed from First Solar, where he was in charge of sales and marketing. 

Carrington replaced Joseph Laia, who arrived at the startup in 2007 to improve the company’s technology development. At the time, MiaSole was producing cells with five-percent efficiency, Laia told me previously, while other companies were making cells that were two or three times more efficient at converting sunlight into electricity. In October this year, the company began volume production of solar panels that achieved 13-percent efficiency. Solar panel efficiency is typically one or two percentage points less than cell efficiencies.

The company hunkered down for a while before it began commercial shipment in October 2009. Earlier this year, the company turned to Intel  for help on running its factory more efficiently.

MiaSole shipped 22 MW of solar panels in 2010 and was hoping to ship over 80 MW in 2011. It doesn’t appear the company will hit that goal. Since it began commercial shipment, the company has done 55 MW to date, Carrington said in a statement Wednesday. But it’s on track to scale up its annual production capacity from roughly 50 MW earlier this year to 150 MW by the end of this year, a company spokesman said.

To grow and compete in a market that has seen a dramatic decline in solar panel prices and the bankruptcies of three solar panel makers (Solyndra, SpectraWatt, Evergreen Solar) this year, MiaSole, which has raised several hundred million dollars, doesn’t think it can do it alone for much longer. Carrington told Reuters  this week that MiaSole needs a partner. Though he didn’t specify what the partner should bring, usually a startup looks for money and help in marketing and sales from a larger company, preferably a company familiar with the industry the startup is in.

Angling for this type of partnership has been a crucial strategy for not just startups, but established solar manufacturers as well. Manufacturing is such a capital-intensive business, and the weak global economy has made it particularly difficult to raise money for building factories in the past three years. French oil giant Total bought a 60-percent stake in SunPower for $1.4 billion earlier this year. Another CIGS startup, Stion, raised $50 million from Taiwan Semiconductor Manufacturing Co., which has licensed Stion’s technology and is gearing up to produce and ship CIGS solar panels in the first quarter of 2012. HelioVolt, another CIGS startup, lined up $50 million from Korean conglomerate SK Group and is looking at building a factory in Korea.

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GE announced Thursday night that it will build the new factory in Aurora, Colo., close to its solar research center and a small, existing factory of 30 MW that it inherited from buying PrimeStar earlier this year. GE was an early investor in PrimeStar, whose cadmium-telluride technology initially came from the National Renewable Energy Lab in 2007. GE became PrimeStar’s majority owner in 2008.

GE plans to start installing factory equipment in January 2012, but it will need time to test-run the equipment and bring the production lines online, as well as to get certification for the panels. Shipment is set to begin in “early 2013,” said Victor Abate, VP of GE’s renewable energy business. The company plans to make a customer announcement at Solar Power International in Dallas next week, Abate added.

GE said it picked Colorado, apparently over New York, because being closer to its solar research team in Colorado will help speed up its technology development and deployment. Indeed, rolling out its manufacturing plan quickly will be crucial for the company to compete in a market that has changed substantially since it formally announced it would do all it can to commercialize PrimeStar’s technology.

Falling solar prices

The prices for solar panels have fallen dramatically in the past year, to the surprise of many companies in the solar industry. The prices have fallen by 30 to 40 percent because of a pileup of solar panels in warehouses after government incentives in Europe — the largest solar market in the world — fell earlier this year.

Many manufacturers have suffered declining profits or widening losses this year, and several American companies have gone bankrupt, including Solyndra, SpectraWatt and Evergreen Solar. Even First Solar, which is the largest manufacturer of non-silicon solar panels in the world and known for its low-cost production ability, posted a big drop in earnings during the first half of this year.

Meanwhile, a host of companies are working on technologies that promise to beat cadmium-telluride solar panels in efficiencies if not price. A 400 MW factory is large but not nearly the size of manufacturing fleet of many top manufacturers today. First Solar runs factories totaling at least 1.4 GW, and it plans to expand that to 2.7 GW next year.

Others are building similar or larger manufacturing operations, including Abound Solar, which is adding 775 MW to produce cadmium-telluride solar panels, and Stion, which is building a factory that will reach 500 MW and produce solar panels using copper-indium-gallium-selenide. Taiwan Semiconductor Manufacturing Corp. just opened a 100 MW CIGS solar panel factory and plans to increase that production capacity to 1 GW by 2015.

GE understands it needs to roll out better, more efficient solar panels to attract buyers. In April of this year, the company boasted of having produced cadmium-telluride panels with 12.8 percent efficiency that appeared to exceed the cadmium-telluride solar panels from First Solar. First Solar then announced in July it had set a world record for cadmium-telluride cells by producing a 17.3 percent cell. The Arizona company also said it already could produce panels with 13.4 percent efficiency and expects to roll out panels in 13.5-14.5 percent efficiencies by the end of 2014 (panel efficiency tends to be lower than cell efficiency).

Abate said GE aims to produce panels with 14 percent efficiency when it begins shipping from the new 400 MW factory.

Abate said GE understands the changing competitive landscape and believes its expertise in developing and manufacturing a variety of technologies, along with its financial muscles, will enable GE to outshine rivals. GE already is a big wind turbine maker and power plant builder, and it just bought a maker of power conversion electronics and motors, Converteam, for $3.2 billion.

“When you put all that together, we have a clear, differentiating strategy to be the most cost-effective solar provider,” Abate said.

Photo courtesy of GE

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Thin film solar trend

Greentech’s got the makings of one of those occasions when the herd veered left and the market went right. The thin film solar startups that were born in the mid-2000′s, and which used the materials copper, indium, gallium and selenium (CIGS) to convert sunlight into electricity, are now facing a tough market. Solyndra, which went bankrupt this month and took down an over $500 million government loan, is only the most high-profile of these companies, and others include HelioVolt, Nanosolar, MiaSole, SoloPower, and Stion.

The creation of companies that use CIGS became a popular pursuit in the mid-2000′s when the price of silicon, which is used as the cornerstone of traditional solar panels, was fetching hundreds of dollars per kilogram. The idea behind CIGS was that as the cost of silicon rose, these companies would make thin film panels without using silicon, and

Workers inspecting panels in Solyndra's factory in April

would be able to make them more cheaply than traditional solar panels. Dozens of top-tier venture firms backed these companies at valuations of billions of dollars.

However, instead of rising, silicon prices have plummeted, reaching the $50 range in June of this year. HelioVolt founder and chief strategy officer BJ Stanbery told us in an interview today that he believes that the industry is going through a “long anticipated consolidation,” and that startups need to find the right partners to survive (HelioVolt announced an equity investment from Korean conglomerate SK Group). Greentech Media reported this weekend that MiaSole is going through a “management adjustment.”

The CIGS startups aren’t just on the wrong end of the silicon price bet, they’re facing a commoditizing solar market that has more supply than demand, the lowest prices in history, a continued weak economy, reduced subsidies in important European solar markets, and fierce Chinese competition. Large companies would struggle in this environment, not to mention a group of startups that mostly haven’t scaled up into large-scale manufacturing yet. Some of these companies will likely get bought, or could find important international partners, but others won’t be as lucky.

When good tech ideas go bad, CLECs

The thin film CIGS solar bet is just the latest tech trend to convince investors and entrepreneurs to enter and then to fall victim to a major flaw and struggle to deliver. Another one that occurred in the late 90′s — for all you telecom vets — was CLECs, or competitive local exchange carriers. GigaOM’s Om Malik wrote about the CLEC tech trend extensively in his book Broadbandits: Inside the $750 billion telecom heist (which you can read for free online courtesy of Google Books, LOL). Essentially the Telecommunications Act of 1996 forced the telecom market to let in upstart companies, coined as CLECS, that wanted to compete with phone companies to offer DSL from the neighborhood level.

But the phone companies that owned the space could charge the CLECs for access, which at the time was called co-location. However at the end of the day, the upfront capital costs eventually made the business model basically unfeasible for most CLEC companies. Dozens of investors like Battery Ventures and Spectrum Equity Partners put investments on the order of $100 million into various CLEC companies like Winstar. These companies burned through cash on these access fees, and in 2001, companies like Winstar started to fall.

In April 2001, Winstar went bankrupt, and articles like this one in the Wall Street Journal touted Winstar: The Debacle for Our Era:

The damage, in fact, was so well distributed among successful, highly sophisticated investors that Winstar is beginning to look a lot like one of those emblematic disasters that comes to define an era on Wall Street much as the battle for RJR Nabisco came to represent the excesses of the corporate takeover frenzy of the 1980s, or the Long Term Capital Management debacle epitomized the risks of high-tech financial instruments in the 1990s.

MVNOs and P2P

Call it the curse of the confusing acronym technology — CLECS, CIGS — and add another one that I covered several years ago: MVNOs, or mobile virtual network operator. MVNOs like ESPN Mobile, Amp’d Mobile, Helio, and others launched in the mid 2000′s with idea to take a brand and turn it into a cell phone company, and rent space on wireless companies’ networks. These companies launched branded cell phones, targeting niche customers that they thought were loyal customers and would pay high monthly bills for branded data, games, and social networks (this was before iPhone and Android and no one yet used wireless data). The startups paid the phone companies network access (like the CLECs did).

Amp’d Mobile raised $360 million from investors like Columbia Capital, Highland Capital Partners, Redpoint Ventures, Intel Capital, MTV Networks, Tudor Investments and Universal Music Group. Helio raised hundreds of millions in funds from SK Telecom and Earthlink.

The upfront capital costs of launching branded cell phone companies and paying the wireless companies access was a huge problem. Add to that missteps by startups like Amp’d Mobile which ended up attracting many customers that didn’t want to pay their bills. Amp’d Mobile, like Winstar and Solyndra, went spectacularly bankrupt. SK Telecom estimated that its losses from Helio were expected to reach between $330 million and $360 million in 2007.

And finally from my colleague and video expert Janko Roettgers: P2P content delivery. Roettgers tells me that the promise of P2P video content deliver was based on the assumption that bandwidth would remain hugely expensive, and also that smaller publishers could compete on an equal playing field for attention and ad dollars if only they had cheap enough bandwidth. Companies like BitTorrent went through funding rounds and a whole bunch of startups launched in this area, too.

However, bandwidth prices went down instead of up, but more importantly Google, Hulu and Netflix sucked up all the attention and content, which suggests bandwidth never really was the biggest problem to begin with. BitTorrent had to pay back its funders to bring down the value and expectations after it turned out that no one wanted to pay for P2P bandwidth and most of the startups in this space have disappeared or are slowly fading away by now. The P2P industry association DCIA even completely switched focus to cloud computing after it realized that there is no money in P2P, says Roettgers.

Anyone have a favorite tech idea that went bust?

Image courtesy of Flashpacking Life, roland.

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HelioVolt founder and chief strategy officer BJ Stanbery told us in an interview that the money will enable HelioVolt to improve its manufacturing technology and expand production beyond the small-scale 20 MW factory at its headquarters in Austin, Texas. The Korean company will evaluate the company’s progress and decide on further investments for building a factory to produce HelioVolt’s solar panels, said Stanbery, though he declined to provide a timeline for when decisions about the factory, including manufacturing costs, will be made.

Like many solar startups, HelioVolt has struggled to commercialize its technology, which uses copper, indium, gallium and selenium (CIGS) to convert sunlight into electricity. The use of CIGS became a popular pursuit when the price of silicon was fetching hundreds of dollars per kilogram in the mid-2000s. Silicon prices have plummeted since, reaching the $50 range in June of this year. At the same time, silicon solar panel makers worldwide have expanded their factories quickly to lower their manufacturing costs.

Solar manufacturers from SolarWorld of Germany to SunPower of the U.S. to Suntech Power of China all have boosted their production. That trend, in turn, has also squeezed startups like HelioVolt, which bet that the use of alternatives to silicon could produce much cheaper solar panels. Solar panels that use alternatives to silicon are sometimes called thin films because of their use of a thinner layer of light-converting materials. CIGS thin-film solar panel maker Solyndra in California filed for bankruptcy earlier this month after borrowing about half a billion dollars from the federal government to build a factory.

Pressure is on

HelioVolt is one of the CIGS companies that have felt these intense pressures, and its survival was in doubt. The company had hoped to start mass production in 2009, and then decided to try that in 2010 instead.

But 2010 proved not to be ideal after all. The company raised $31.5 million in debt and options in 2010 and then secured another $8.5 million in debt and was able to improve its technology. HelioVolt also said at that time that it was getting certification for its solar panels so that it could distribute its solar panels widely. A few months after that announcement, a HelioVolt investor said the company was looking for a buyer.

Stanbery said HelioVolt is well aware of the intense pressures as it seeks to navigate a market in which smaller players – and some big ones – have had to turn to much larger companies for financial and other help.

As we pointed out in this post, many solar companies have been sold in part or whole over the past year. CIGS solar panel startup Stion lined up Taiwan Semiconductor Manufacturing Co. as an investor and just opened a factory in Mississippi. TSMC rose to prominence as a foundry for chip startups that couldn’t afford to build their own factories. PrimeStar, a startup making cadmium-telluride solar panels, convinced General Electric to support its technology, and PrimeStar promises to build a 400 MW factory to make the solar panels.

“We do believe that the industry is going through a long anticipated consolidation, particularly in the thin film area,” Stanbery said. “The winners will be those who fill find the right partners, and we have found the best partner for HelioVolt.”

SK calls itself the third largest conglomerate in Korea that includes 75 subsidiaries and affiliate companies. One of its better known brands is SK Telecom, but SK also is deeply involved in energy and chemical industries, which could help HelioVolt procure materials and scale up manufacturing and sales.

Focus on Asia

Stanbery said the SK investment reflects that Asia has become the company’s market focus, though where HelioVolt will build its first commercial-size factory remains to be determined. But the plan isn’t to expand its existing, 20 MW factory in Austin, from where it’s doing research and development and making panels for early customers, said Iga Hallberg, VP of business development at HelioVolt.

The Korean government has provided solar incentives, but the country is a small market compared with those in Europe, the United States and Japan. China could be a big market because of the government’s announced plans to subsidize solar power projects.

While Stanbery declined to discuss the company’s manufacturing cost reduction plans, he said the company believes it can produce solar panels at lower costs than First Solar’s once its annual production capacity reaches “around 300 MW.”  Of course, the timing of achieving that goal will be crucial, and the details of the plan are still being worked out.

The company is rolling out 75-watt, 2-foot by 4-foot panels, Hallberg said. That will give the panels an efficiency of about 10.3 percent.

A project is underway in Texas that uses HelioVolt’s solar panels. A 23 KW installation is taking shape at Texas A&M University, Hallberg said. The project should be completed around October, she said. She declined to discuss other customers. HelioVolt is targeting commercial rooftops. HelioVolt has raised over $200 million since its inception in 2001, the company said.

Images courtesy of HelioVolt

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San Jose-based Stion makes solar panels that use copper, indium, gallium and selenium (CIGS) instead of conventional silicon to convert sunlight into electricity. In January this year, the company announced the plan to build the Mississippi factory, which the company expects to eventually reach 500 MW of production capacity and require $500 million in investment. Stion completed a 10 MW pilot line at its headquarters last year.

The factory represents a nice coup for Mississippi lawmakers, who offered Stion a $75 million loan plus tax and job training incentives to build and run the factory. Legislator and Gov. Haley Barbour recently lured another Silicon Valley startup, Calisolar, by offering the solar silicon producer a $75.25 million package to build a factory there.

Stion plans to expand its production in Mississippi in phases. The first phase is supposed to reach 100 MW of production capacity. The company held a grand opening ceremony for the factory on Friday, but it won’t start producing solar panels until later this year, Stion said. Manufacturers need time to test-run equipment and train employees before rolling out products.

Stion hopes to mass-produce solar panels at much lower costs than its rivals, a goal that is shared by many startups and is increasingly difficult to accomplish. Wholesale prices of solar panels have plummeted in the past three years as manufacturers in the U.S., Asia and Europe built many factories.

Chinese manufacturers, in particular, have expanded production rapidly thanks in part to the huge loans they received from government-run banks. The stiffened competition already has forced three American companies, including CIGS solar panel maker Solyndra, to file for bankruptcy in the last two months.

Stion raised a Series D round of $70 million as of June 2010, including $50 million from Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s largest contract chip manufacturer. Before that, it had raised $44.6 million in equity from investors including Khosla Ventures, VentureTech Alliance and Lightspeed Venture Partners.

To expand the Mississippi factory to 500 MW, Stion plans to raise at least another round of funding and will consider an initial public offering, the company’s CEO, Chet Farris, told us earlier this year.

Image courtesy of Stion

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