Look Out, First Solar: AVA Solar Scorches With $104M

It’s hotter than the lights at the Pepsi Center in the world of solar funding this week. On the heels of the news that thin-film solar startup Nanosolar has raised $300 million (bringing its total funding to half a billion dollars), solar startup AVA Solar announced late Wednesday it has raised a massive $104 million in equity financing from DCM, Technology Partners, GLG Partners, Bohemian Companies, and Invus.

AVA is working on making thin-film photovoltaics out of cadmium telluride — the same material that has boosted First Solar to its solar darling status — so everyone is interested to see how the company will stack up to the leader. In some of the Fort Collins-based company’s literature it boasts it can produce solar PV modules at a cost below $1/watt. First Solar calls its manufacturing cost per watt of $1.14/watt for the first quarter of 2008, “the lowest in the industry;” that production cost will also likely come down over the coming months and years.

We’ll see what AVA’s production costs end up being after it starts up its 200-megawatt solar PV factory sometime this year. The company appears to be using a similar process to First Solar, depositing a thin layer of cadmium telluride on glass.

AVA says it has reached “distributed conversion efficiencies around 11.5 percent” — First Solar has similar efficiency, and has reported an average of 10.7 percent with its cells, and a goal of 12 percent.

If AVA could end up being able to produce its PV more cheaply than First Solar, it would put them in a good position to enter the new, massive market of utility-scale and rooftop solar. First Solar brought in revenues of $267 million for the most recent quarter, 36 percent above the $196 million in the previous quarter and more than three times larger than the $77 million in the second quarter of 2007.

It’s not always hip to be a company a little later to the game. Eric Wesoff and the Greenlight crew, who tipped off the story of AVA’s funding yesterday, talked to investors that passed on AVA’s funding, because the valuation was too high, and the deal was too much of a copycat of First Solar. But AVA could still create a sizable business. AVA was incubated out of the labs at Colorado State University with a partnership with the National Renewable Energy Laboratory, and formed in January 2007.