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Soladigm Closes $40M for Its First Smart Window Factory

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Windows that can be tinted on demand could be a promising way to cut energy costs, but technology to control the amount of light and heat that pass through windows isn’t common. Soladigm hopes to change that and has just lined up an additional $10 million in equity financing to bring a Series C round to a total of $40 million, the company said Tuesday.

Soladigm plans to use some of the money for its first factory, which will cost about $130 million, be located in Mississippi, and be set to start shipping its electrochromic windows in the first quarter of 2012, the company said.

The startup, founded in 2007 and based in Milpitas, Calif., has attracted a good amount of funding over the past year. Last summer, it announced the plan to build its factory in Mississippi. The state has offered the company a loan of $40 million and another $4 million in other incentives to set up the factory there. Soladigm was awarded a roughly $3.5 million federal research grant and another research grant of $400,000 from the California Energy Commission.

Soladigm raised $30 million for its initial C round last December, and was chosen by General Electric (s ge) as one of the first 12 winners of a $200 million challenge to encourage greentech development. The funding announcement on Tuesday brings the total venture capital raised by the company since its inception to about $70 million and added the Westly Group and Navitas Capital to its roster of investors.

Electrochromic windows are so called because they change colors to reflect or absorb light when a low-voltage electrical current is applied. The ability makes it possible to cool or warm up a room and thereby save energy costs. Soladigm’s CEO, Rao Mulpuri, explained the company’s technology and plan to me last year and said a study of commercial buildings in five cities showed a 25-percent cut in energy use in heating, ventilation and air conditioning.

The startup uses a thin-film deposition process to create conducting layers between two panes of glass for controlling the amount of light and heat that pass through. The layers are made up of two, transparent, conductive oxide films that sandwich an ion storage layer, an electrolyte and an electrochromic layer. A low voltage applied to the conductive oxide drives the ions out of the storage layer and across the electrolyte to run into the electrochromic layer. The collision causes the electrochromic material to absorb or reflect light, depending on how it’s tuned. It also causes the material to darken and give the glass window that tinted look. The tinting goes away when the voltage is reversed to drive the ions back to its storage layer.

The secret ingredients are the materials used to make the electrochromic layer. Soladigm is using a tungsten oxide-based electrochromic layer for its first-generation product. Tungsten oxide is a well-known material for this type of window, but it also has shortcomings, such as absorbing too much light and causing the windows to become too hot to touch.

Soladigm has licensed technology from Lawrence Berkeley National Laboratory that will use alternative materials to solve the over-heating problem. The company also received two patents last year for using different materials for various layers in between glass (see first patent here and second patent here).

There are different ways to control electrochromic windows. A simple control system will allow people to manually make the switch. Sensors can be added to activate the windows when the room temperature reaches a particular level or during a particular time of the day, for example.

The big challenge for popularizing electrochromic windows is cost. Electrochromic windows can fetch around $100 per square foot, while windows with reflective coating already are widely available and cost far less. Soladigm has declined to disclose its manufacturing cost; it has a pilot production line.

Many other electrochromic window developers also are eyeing what could be a good market. Sage Electrochromics in Minnesota already has been shipping products, and it recently raised $80 million from Saint-Gobain to build a new factory. The U.S. Department of Energy also offered Sage a loan guarantee of $72 million last year. Last October, Sage said it had broken ground on the new, 300,000-square-foot factory, located in Minnesota.

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