A solar startup's bid to reinvent Itself when others have failed

A Silicon Valley solar startup that remains standing after many of its peers were squeezed out of the business by an oversupply of solar panels in the past three years now is setting out to show it has a fighting chance to be a major player.

The company, formerly called Solexant, is now Siva Power and has been pursuing a new technology and manufacturing plan that its executives believe will make it possible for a startup to compete in the major league.

When it was Solexant, the company was developing ways to print cadmium-telluride nanocrystals on rolls of flexible metal foil to create solar panels. I first saw a presentation of the company’s technology development in 2009 and followed its progress as it moved from doing pilot production and tried to improve its technology’s sunlight-to-electricity conversion rate. It was hoping to build a large factory in Oregon.

Those plans didn’t pan out. Solexant, like many solar startups, was trying to commercialize their technologies during the time when the global market was awash in solar panels. The Chinese manufacturers, in particular, had managed to build many large factories with their government’s help, and in the process they had cut costs at a faster pace than many of their competitors had anticipated. Solexant’s board hired a new CEO in early 2011 to figure out a new strategy.

The oversupply of solar panels has had a profound impact on solar startups worldwide. Many of them, including Solyndra, Nanosolar, MiaSole, SoloPower, Global Solar and AQT Solar either went bankrupt or got bought cheaply or shrank so much that their future is uncertain.

All those startups have something in common: they all worked on using a compound of copper, indium, gallium and selenium (CIGS) to converting sunlight into electricity.  A very thin layer of CIGS could produce a good amount of electricity — comparable to what the common silicon solar cells could achieve — if researchers are able to figure out a good way to deposit the materials evenly and seal CIGS cells tightly to avoid moisture, which seriously degrades their perormance. And, of course, they need to figure out how to produce those cells and turn them into panels quickly. You have to be able to mass produce them to cut costs.

Siva decided to ditch the cadmium-telluride printing process to pursuit the use of CIGS. So what does Siva have that will likely help it find success when many others have failed? The company hired a well known CIGS expert, Markus Beck, who worked at First Solar FSLR -2.61%, Solyndra and Global Solar Energy. The process Beck and his team settled on at Siva is to use co-evaporation to deposit the compound and to do so onto a glass panel, which will then goes through encapsulation and other steps before rolling off the assembly line for shipment, said Brad Mattson, Siva’s CEO.

Mattson said his company’s technology is far better than a common  alternative method, which deposits CIGS on a roll of metal foil, cuts the roll into strips, selects those with similar power and other characteristics and assembles them into a panel that is protected by glass.

The idea of putting CIGS directly on a piece of glass that is already sized to be a solar panel is hardly new. Some of the surviving CIGS solar manufacturer, such as Stion and Solar Frontier, do just that to simplify the production process. First Solar is very good at it — it’s able to produce its cadmium-telluride solar panels cheaply because its glass in, panel out process is so fast.

Another key strategy for Siva is to build a 300-megawatt “pilot” production line. A typical solar pilot production line is far smaller, maybe 5 megawatts to 30 megawatts, and it’s used to prove to potential customers that the production process works well for mass production.

The scale of the pilot line also reflects how fast certain key pieces of factory equipment are able to produce solar panels annually. So when it’s time to build a full-size factory, a company might start with two or three lines. As it improves its production process and becomes more efficient, the yearly production capacity of each line should increase. Siva is skipping the baby steps to build a key piece of factory equipment that Mattson said will be able produce CIGS solar panels at a far faster rate — 300 megawatts per year.

“We plan to do it at a crazy scale,” Mattson said.

The ambitious plan means Mattson will have to work hard to raise money for this pilot production line. He put its cost at around $100 million. Its location has yet to be determined.

If he’s able to raise the necessary money and puts together a production line that performs as expected — that will be a tough challenge — then he might be on its way to turn Siva around. The company’s goal is to produce solar panels with a 15% average efficiency at $0.40 per watt, something that Mattson said is doable after running the 300-megawatt line at full throttle for two years.

First Solar, in comparison, was making solar panels with over 13% efficiency at $0.59 per watt during the third quarter of this year. Siva is hoping for a second chance. It might have a shot, given that solar manufacturers are starting to generate profits again and make plans for expanding production.  But that shot can also stray easily and never hit the target.

http://www.forbes.com/sites/uciliawang/2013/11/21/a-solar-startups-bid-to-reinvent-itself-when-others-have-failed/?ss=business%3Aenergy