10 Questions for Nanosolar CEO Martin Roscheisen

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Martin Roscheisen, CEO of thin film solar company Nanosolar, founded the startup five years ago when solar was nowhere near the hot topic it is today. He managed to fund the company with at least $100 million from venture firms like Benchmark Capital and Mohr Davidow and individual investors like Google founders Larry Page and Sergey Brin, and entrepreneur Jeff Skoll.

The Austrian citizen born in Munich is also a long time Internet entrepreneur who already founded three startups with a combined value of more than $1.2 billion. In an email interview he answers 10 questions for us:

Q). You were one of the first Valley entrepreneurs to focus seriously on green tech – If you had to start a clean tech company in 2007, and not 2002, what would you do differently?

A). I know very little about anything in greentech other than solar. If I had to start a solar company in 2007, I would take a pass. This industry is in a very different stage now. This is going to be like the DRAM business much more quickly than many may realize. I have a hard time seeing how anyone can be successful in solar who isn’t truly in volume in 2008 with a very mature, very cost-efficient technology.

Q). Before Nanosolar you were an Internet entrepreneur – what are the lessons that you’ve learned in that industry that have helped you most when you moved into clean tech?

A). Hiring for “raw talent” (and sense of urgency and drive to win) over “experience”. Being disciplined about not overhiring. Focusing on business not busyness. Quickly ignoring all sorts of miscreants. Accelerating momentum without spending a dollar on marketing. A few other things.

Q). In the thin film industry there are several players like Miasole or SoloPower that are looking to build the next CIGS thin film technology. What will make the difference in which technologies win the deals?

A).An IEC-certified panel product available in near-term 100MW volume at a fully-loaded cost point in the sixties [cents/Watt] or less so that one can profitably sell at a $.99/Watt wholesale price point. There’s no chance a process technology based on a high-vacuum deposition technique is going to make this. The window of opportunity for that more conventional approach to CIGS existed perhaps two years ago in the form of the chance of getting to market earlier with such more incremental technology.

But by now, the industry has moved on generally and Nanosolar is there with far better third-generation process technology that took a $150-million deep-dive into very science-intense research and development to develop, and that momentum gap that will continue to broaden fast.

Q). The thin film industry has seemed to undergo delays in general – has the time to production taken longer than you expected, or are critics being unreasonable?

A). It is correct that there’s at least one journalist/blogger running the danger of being remembered in history as the one who scolded Carl Benz for being a month late with the first automobile. Thin film solar cells are an amazingly advanced and complex technology that even the brightest groups of people in the world can find unusually challenging. Furthermore, developing materials processes and building manufacturing tooling and operations simply does not happen on software or consumer electronics development cycles.

Especially not for a profoundly transformative new technology such as Nanosolar’s. So not even our own investors care really all that much about whether we’re a bit late or not; it’s more all about getting there safely. That said, it turns out that we have executed very well and are very close within our internal timeline originally proposed to our investors in 2005.

Q). A report from the Information Network said that delays in thin film have “soured venture capital firms and other equity investors who had hoped for faster returns on investments.” Thoughts?

A). I don’t know about “souring” but if anyone expected a materials based business to deliver YouTube type investment IRRs, they might have put their hopes in the wrong place. On the other hand, a company like Nanosolar has a credible path towards shipping $10 billion worth of high-ops-margin product to strong commercial customers with a sales model that could not be simpler and more predictable; and at that point the company would perhaps still only have a one-digit market penetration percentage. So there will be attractive returns for long-term investors of all sizes. But no overnight killing. We have turned down a ton of interested investors who we did not feel had the right outlook.

Q). Will Nanosolar begin production this year?

A). Yes, we’re on track with this. Do not expect an Apple style product launch though. Our first 100,000 panels are already set to go into closed, private, utility-scale deployments, with a tall fence around them and not much accessibility to the general public.

Q). Does the company need to raise any more money?

A). We are fully funded for reaching profitability. We may choose to raise additional capital for accelerating our capacity expansion.

Q). An analyst told me that thin film solar companies in the U.S. are worried about price competition with Chinese solar firms. . . .is that true and something Nanosolar thinks about competitively?

A). If I ran a company based on solar thin films deposited in high-vacuum chambers, I’d worry too. Because [Chinese market leader] Suntech achieves better capital efficiency today with conventional silicon-wafer based solar factories than a typical thin-film vacuum line. That’s a problem right there. At Nanosolar though, we have a nanoparticle-based printing process that is 5-10x more capital efficient on the total line. So we have a good delta.

All things being equal, given the $/kg economics of solar panels, I don’t think the competitive end game is to be shipping them from China. The end-game winners will be optimized for net working capital days and proximity to customers. (Btw, shipping from China costs ten times as much as shipping to China these days…) The middle game will be dominated by quality issues; this is a product that people expect to last for decades.

Quality is quite hard to do with the kinds of manual factories that are behind the capital efficiency of Chinese production lines. I see a lot of big customers in Europe quite unhappy with Chinese panels. That all said, my general rule on China is that one has to recheck all of one’s assumptions about China about once every three months.

Q). The company’s chief scientist Chris Eberspacher joined Applied Materials and some bloggers were wondering if the company is losing its core startup talent. Thoughts?

A). I don’t think that’s the case. There may have been a bit too much blue-sky blogging on that by some. Perhaps the following background helps to clarify all of this a bit:

Chris Eberspacher is a 20-year PV industry veteran who joined us 2.5 years ago as an R&D group manager at a time when our technology was already in full development and the technical roadmap established. His initial review of the many things we had started doing concluded that this all makes a tremendous amount of sense, has a lot of distinct advantages, and that we should proceed with exactly these plans without incorporating any of the work pioneered by Chris himself.

It turns out that things continued like this. Many of our most significant advances and breakthroughs came from intensely trying new things often diametrically counter to any beliefs. So our core engineering culture got reinforced very much around questioning the past, not assuming anything, and fundamentally not at all that much valuing the past 20 years of solar research. Chris still managed to be part of this for a good amount of time, with him in particular representing us externally very well.

But the internal leadership issue ultimately boiled over late last year after our pilot line team started producing product-quality cells that were more efficient than those produced in the lab by the research team managed by Chris. Lab cells are supposed to be steps ahead not behind the pilot-line cells. So our key engineers, our board, etc. ended up concluding that Chris, for all his experience and industry stature, had to be replaced with one of our younger guys who was the de facto research group leader anyway already.

We did a reorg and moved Chris into a non-operational role. We accepted that he most likely may have larger ambitions that the scope of that. Sure enough, he decided to resign the next month and started looking for a new job. Two more months later he landed at Applied. I actually helped him with getting the job at Applied. He’s going to do very well there among other 20-year solar-industry veterans and presumably a culture that values that kind of experience more than we ever did.

Our own lab team is styling now. And our pilot line running even better. For our first product, the pilot line matters foremost of course. So none of all of the above really affects our product introduction all that much. But we also want to continue to be a powerhouse of lab innovation in the style that’s proven to work best for us: Mostly driven by smart kids straight out of school who we give all the tools and toys to try crazy new things; plus just a thin dose of managers who know how to earn their respect.

Q). Do you have customers lined up to purchase the product, and if so which companies?

A). We are lined up with the industry’s top system integrators as our partners, and it is clear we are going to be manufacturing capacity limited for about as far out as we can see. There’s presently really only two truly scalable solar markets in the world — Germany and Spain — and we do a lot there. Being a scalable market is today as much about feed-in-tariffs as about the administrative framework; tomorrow, with grid-parity PV systems, it is primarily about the latter.

For the United States to also become a truly scalable market, some ingrained bureaucracy stands in the way for that still — everything from 1920s-era conduit-around-cables and grounding requirements to insanely complicated town-by-town permitting processes. It’s hard to believe that California is more bureaucratic than Germany — but it is so in solar power. Fortunately, people are beginning to realize this and so change is possible even if it affects electric code rules designed around 1920s electric technology.

116 Comments

GK

I can’t believe there are people sophisticated enough to read this article who believe IPCC reports. Religious much?

Joseph S Chevalier

Martin, December 15,2007

I am a retired entrepenuer from Pennsylvania. I retired to Florida in 2002 and am ready for a interesting chalange in Solar Energy. I read an article on Nanosolar’s Flexible solar cells and can see much opportunity in Florida. Most of the solar here is traditional pool heating and a limited domestic hot water heating. A few companies are considering photo-voltaic applications, however the pay-back is quite poor.

Kindly send me an e-mail to discuss the possibility of being a representive for your growing company.

                           Sincerely Yours,


                            Joseph S. Chevalier
Tony Byron

http://www.nanosolar.com/history.htm:
“March 2006: Nanosolar’s research and development team produces cells with world-record efficiency: the most efficient printed cell ever. NREL certifies these efficiencies achieved.”
I would think nanosolar would post a “more info” link that documents that claim. If that claim is/was true it would also be nice of them to actually state the efficiency of their cells.
I am somewhat skeptical of this company.

trademark registration

It seems to me like Nanosolar has what it needs to become a giant company in no time with a little bit of luck. Companies dealing with renewable energy or alternative sources of energy will definitely be big in the near future.

Longone

This story does not ring true. Read closely and notice the way everything is generalized, also the “display glass” effect, to arouse the public without offering any opportunity to participate.

The impression is that Nanosolar is trying to monopolize this production technique and protect it from competitors. But in today’s world it is futile. Employees will go elsewhere and the tribal knowledge will eventually spread throughout the industry.

It reads like a tease. It sounds like setting up for pure profit. They don’t want to open source their technology for the betterment of the world. Very selfish old fashioned capitalism of the robber baron era.

Until it is made available to the public and featured on a major TV network news magazine, Nanosolar is pure and simple – vapor ware.

What ever happened to the satellite phones? They were not practical for the marketplace. A lot of smart money lost on that one. So don’t assume Google backing makes Nanosolar legit.

Don Bosworth

Over 20 yrs ago, I sat in an advanced Solar energy class, listening to a classmate who worked for a “thin-film” company (Ovonics?) tell me about the machine he was helping to design for a local PV R&D/manufacturer. I thought “WOW! This is really going to set the PV market on fire!” 20+ yrs (and a new millenium later) and the PV market is a “contained fire”….production is sold-out in advance, but PV doesn’t really register on a pie chart of electrical contribution. A lot of this MAY of been because of Political/Economic constraints (cheap fossil fuels and indifferent politicians). Now, as a nation (and furthermore, as a global society) we are waking-up to the REAL costs of “traditional” energy sources (War, Global Warming, Food vs Fuel, Core Economic Inflation…think oil prices, balance-of-trade, etc.). People are demanding (and investing) in Alternatives such as advanced PV, Hydrogen on Demand, Combined heat and Power, and energy storage devices.
If the “Real Innovators” don’t deliver these products REAL soon; you will see more of the same “old-school” resources being given the “Lipstick-on-a-Pig” treatment (think “clean-coal”, Alberta Tar Sands, ANWR drilling schemes, nuclear, etc)…and shoved back down our throats!
I agree with Mr Roscheisen about China; the USA has “given away” so many industries over the last 30+ years, we can’t afford to give away something as IMPORTANT as ENERGY! Not to mention, the Chinese demand that you “partner-up” with one of their companies and relinquish Intellectual Property Rights to manufacture over there (if they don’t just outright ignore your patent). On the electrical Code issue: Yes, a Uniform Code would help greatly in design and marketing of PV products. The code is in place to protect the public’s safety and installation integrity,…. but I can’t see why Industry and National Code officials can’t work work towards cost-effective and safe requirements on issues such as BIPV and grid-tied systems.
Assuming everything I’ve read about Nanosolar (from Nanosolar) is true…and this is a mature, tested (not Beta) product…then opening one or two plants worldwide isn’t going to make you an Industry Leader. Your production is sold-out in advance; and due to world-wide demand for competitive alternatives, new factories need to be built. There are only 2 variables that preclude you from further expansion: Capital and/or Labor shortages. Though gainfully employed with a large Automotive R&D center, I can still help you with the 2nd!
This is Nanosolar’s chance to be the Intel, Toyota, or Google of the PV industry. I would love to get my hands on some stock…or at least let me sell the product!

Don Bosworth

Alfred Collins

I agree with you Phil Rowlands. Nanosolar type technology needs to be rolled out on an absolutely massive scale to benefit the earth and it’s inhabitants. Trickled out by a single company protected by patents, the company’s investors will get rich, but the rest of earth’s citizens see no benefit; unless they can scale up dramatically! Then they run up against the 450GW material resource limit. One must assume their goal is to consume the entire CGIS material resource base before their patents run out. 450GW is a drop in the bucket compared with what the world needs.

Phil Rowlands

The latest IPCC report (November 2007) says we have only a matter of a few years to get our CO2 emissions down before some unpleasant climate effects kick in. By the time Nanosolar gets its product to market and in stable volume production it will be too late. We need 100’s of their plant being assembled around the world now if it is to have any impact not just a couple. Only governments can deliver this scale of commitment in the time available.

kanman

You must be related to Al Gore. There is a problem with fossil fuels for sure, but let’s not overhype it again, shall we? It’s 2010 and colder than ever.

Save Gas

What efficient are Nano Solar cells compare to the best solar cells? are they close to 20% efficient or better?

DAVID CROSBY

I’M JUST A LITTLE GUY WHO CAN SEE THAT YOUR TECHNOLOGY IS GREAT AND FOR THE FUTURE. I WOULD LIKE TO PURCHASE A MODEST AMOUNT OF YOUR STOCK WHEN IT BECOMES AVAILABLE. THE SHARES WILL GO TO MY 4 GRANDCHILDREN. I AM RETIRED AND DISABLED, AND HAVE LIMITED INCOME, BUT I HAVE SET ASIDE SOME $$$$ FOR JUST SUCH AN INVESTMENT. PLEASE. CAN YOU NOTIFY ME WHEN YOUR STOCK WILL BE AVAILABLE, AND YOUR MARKET SYMBOL ???
MANY THANKS FOR YOUR HELP, AND CONTINUED SUCCESS ! ! SINCERELY, DAVE CROSBY

HighEnergy

I was wondering where Nanosolar plans to get this powder in bulk

Excellent question, seeing as how quantum dots (at least all the descriptions of dot structures that come to mind) have been made in research environments under high vacuum. There are techniques for precipitating atomic scale particles, both metals and silicates, out of solution, but I’ve no idea about gallium.

Luke Macmichael

Nanosolar all the way! If this is true it will change the world! Please scale up and out as quickly as possible. I’d love to dedicate my life to the cause if these numbers pan out.

Joe scientist nobody

I saw a special on TV about Nanosolar. It claimed Nanosolar uses a “nano mixture” in the production process. I also work in the nanotech sector. I was wondering where Nanosolar plans to get this powder in bulk? where might my industry fit in? The interview here sounded good but I personally need to see more data before I buy into all these variables. It sounds good and all but I need more hard numbers and data before I really totally believe it. I Still hope it is successful because oil waste is eventually going to catch up to all of us. I would like the CEO to ANSWER some harder questions before I buy into the whole deal. I really hope they succeed but we all need to see more hard numerical data. Over generalities abound as usual. True science needs hard numbers. Plain and simple. Mr CEO can you deliver us some good math to chew on?

Peter Demos

I have invested in other Companies in the same field ..such as xsunx) xsnx) and octilion (octl). Please send me your symbol. Thanks.

Zmago KOROSEC

Bonjour Martin,

Congratulations for your perspectives and the direction you have given to your NanoSolar company. In this part of “old” Europe your projects are realy seen as a new way on the futur of energy supply.
If I may ask just one question : Is Nanosolar looking for a strategic site to locate a production facility in Europe ? if the answer is Yes I hope that Eastern Europeen countries are already targeted.
I may help and get involve in such project.

Best Regards

Tim Westhoven

If the quality is superior, if the supply of raw materials is plentiful and accessible enough, if supply can meet demand fast enough to outrun competitors in the beginning years, Nanosolar should do well. If their first year’s production is sold out, maybe they should build a plant in the Midwest to assist in the development of the company. I hope we see the company come to fruition as an industry leader, way ahead in their field.

Robert Smith

Martin,
I have been following your development since publication of some of the initial research on quantum dot technology. I applaud your efforts and continue to sing the praises of solar technology.

One request: make enough for us all to have clean energy, not just the rich corporations.
Robert

John McKnight

The devil will be in the details of sourcing, manufacturing and servicing sales, cusomer service.

The basic technology nanosolar has developed seems to be good but the execution of the solar cell installations will be critical. I would suggest nanosolar go with specialty engineering contractors to ensure appropriate applications and customer satisfaction. QUALITY.. QUALITY..QUALITY. Establish the name brand.

Robert Pritchett

We need this technology loosed on the public so badly! And I agree that we need to get this “Made in America” instead of having it outsourced offshore. Truly a sea-change shift in solar technology.

I for one, want to sell it.

Go, nanoSolar!

F. Calvo

Me gustaria conocer mas detalles de los puntos de ventas en EEUU y las posibles representaciones fuera de EEUU. Saludos,

Ing. kevin cornejo carhuamaca

Reciba mis mas cordiales saludos quisiera saber sobre las cordinaciones para la venta de estos equipos en mi pais siendo esta muy tentadora para el desarrollo de las tecnologias renovables en el peru.

John

i would like to see and feel this product
give me a light for my shed or a fan
i’m a heating and ac man and would like to intergrate this product into heating and ac heatpump
an answer from nanosolar would be very nice.
in the mean time it seems to be a pipe dream.
I have consumers from the past 3 years that i have installed the hiest eer/seer heating and cooling/heatpump that would have me intergrate this solar product to get them off the grid and away from the gas co

Koen

How much energy is needed to produce and collect the raw materials copper, gallium, indium and selenide? How efficient is CIGS solar cell recycling?

Koen

There are more factors that determine the solar cell cost price, such as the price of gallium, indium and selenide. How cheap are these materials (and how big are the world wide stocks) compared to silicon which is practicaly everywhere? How fast will nanosolar run out of raw material supply needed for manufacturing CIGS solar panels? 1 year? 10 years? This is the most important question to ask nanosolar.

anonymous pv expert

Martin – is your 60 cents/Wp price point for cells or for modules? After all FSLR with a vacuum based process is at about $1/Wp for modules RIGHT NOW. So if your price point is 60 c/Wp for cells, you are not better than an existing, proven, vacuum based approach that draws on “the successes of the past 20 years.” Everything you say shouldn’t matter.

Last I heard, you were making flexible cells (not modules) to go into encapsulated modules to replace silicon cells.

David Matterhorn

What a load of horse poop. This fellow Martin R is such a twat. I live in silicon valley and watch this company closely. It is a grenade waiting to go off. All vapor. Not substance. Engineers are leaving, CTO quit. Vendors are fed up. Stop fooling the industry Martin. Nanosolar is a charade.

Chester Huggins

Glad to see that this awesome technology is piloted by such a level-headed and intelligent leader. The innovations+final costs+management will bring this to the realm of revolutionary.

Vijay

Martin:
Very interesting interview. You were refreshingly candid and I liked your comment on questioning the past and not assuming anything. From this interview I got the feeling that Nanosolar is in top of their act and should be a hugely successful company. Good luck with your path forward.

Vijay.

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