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June 22, 2006

World's Largest Solar Plant Planned in Bay Area

Special to
by Paul Rogers, Mercury News
Palo Alto, California [Mercury News]

A Palo Alto company has decided to build the world's largest factory for making solar power cells in the Bay Area -- a move that would nearly triple the nation's solar manufacturing capacity and give a significant boost to a growing source of clean energy.

"The real innovation is that we're trying to move the photovoltaics industry from the economics of the semiconductor business to the economics of the printing business."

-- Erik Straser, a general partner in MDV-Mohr Davidow Ventures of Menlo Park, one of the venture capital firms that is funding Nanosolar

Nanosolar, a privately held company founded in 2001 with seed money from Google founders Larry Page and Sergey Brin, is scheduled to make the announcement Wednesday, and in the next two to six weeks will select either San Jose, Santa Clara or San Francisco for the facility.

At capacity, the factory could turn out enough solar cells each year to generate 430 megawatts of electricity, said Nanosolar CEO Martin Roscheisen. That's enough electricity to power about 325,000 homes. By comparison, all solar manufacturing plants in the United States combined currently produce enough cells each year to generate 153 megawatts.

Backers of solar power said the project is the latest example of how demand for solar is rapidly expanding, and how the technology, once the realm of hippies and back-to-the-land advocates, has become a hot commodity among some of the same Silicon Valley engineers and venture capitalists who made a fortune in the 1990s during the Internet boom.

"This is a spectacular announcement,'' said Rhone Resch, president of the Solar Energy Industries Association, in Washington, DC.

"This is a very important step for us to address the energy crisis we face in this country. We cannot drill our way out or mine our way out, but we can manufacture our way out.''

Roscheisen said he will open the new factory, which will employ several hundred people, by the end of 2006, and expects to begin producing a type of paper-thin, flexible solar cell in 2007. Two weeks ago, he met with San Jose Mayor Ron Gonzales to discuss possible locations.

David Vossbrink, a spokesman for the city, said San Jose is willing to streamline permits and reduce building fees for the company, but has not offered cash incentives. It was unclear Tuesday what incentives, if any, San Francisco and Santa Clara might offer.

The cells, each several inches across, will be assembled at first into solar panels in Germany, one of the world's biggest markets for solar power, Roscheisen said. Eventually, the panels will be shaped to fit archways, columns and other parts of buildings. The company has arrangements to sell the panels for use on the rooftops of large buildings, on homes and as stand-alone power plants, he said.

"This is a good space right now,'' said Roscheisen, 37, who holds a doctorate in engineering from Stanford University, and who sold his Internet company eGroups to Yahoo for $432 million in 2000.

"The market is very, very large. The technology is very complex. Once you figure out the technology, there are real opportunities.''

Globally, the solar industry totaled $11.2 billion in 2005 -- up 55 percent from a year earlier. It is projected to reach $51 billion by 2015, according data compiled by Clean Edge, a business research firm based in Oakland.

The U.S. has lagged Japan and Europe in solar production, and is now a distant third, with about 10 percent of the global market. The new plant would move the U.S. to second place, behind Japan.

High oil and natural gas prices, along with concerns over global warming, are driving demand, said Ron Pernick, a spokesman for Clean Edge.

"Solar has been expanding at growth rates more akin to the personal computer industry than the energy industry,'' Pernick said. "There is a real ramping up of manufacturing and output. This is a big coup for the Bay Area.''

Pernick noted, however, that a key question will be how fast Nanosolar can ramp up to full capacity to run the world's largest solar factory. Currently the world's largest solar factories are in Japan, run by Sharp and Kyocera.

"It's one thing to announce your output target, and it is another to bring it online,'' he said. "But if they can deliver on that, they are going to be one of the first to deliver a mass-produced thin film at competitive prices.''

About 90 percent of the world's solar energy comes from solar panels made of cells containing silicon crystals. Simply put, sunlight hits a silicon cell, exciting electrons and creating an electric current.

Demand is so high that there is a shortage worldwide in the kind of refined silicon that solar panels are made of.

But Nanosolar and other companies, such as Miasole, a privately held San Jose firm, have discarded silicon as their semiconductor material. Instead, they are working on mass-producing a complicated new technology: printing photovoltaic cells onto flexible plastic and foil, using a copper alloy that absorbs light and creates electricity.

The goal is to dramatically bring down costs, which have been the main stumbling block for expanding solar.

Nanosolar has been working on prototypes for four years. Roscheisen said Nanosolar's cells are now as efficient as traditional silicon cells, and can be manufactured at one-fifth the cost. However, its thin-film technology is not available for sale yet.

"This company is much more similar to printing a newspaper than making computer chips. We start with a giant roll of foil and print on it and cut it up,'' said Erik Straser, a general partner in MDV-Mohr Davidow Ventures of Menlo Park, one of the venture capital firms that is funding Nanosolar. The company has raised $100 million to date.

"The real innovation is that we're trying to move the photovoltaics industry from the economics of the semiconductor business to the economics of the printing business,'' Straser said.

Solar also is at the center of other Silicon Valley efforts. Last November, SunPower, a San Jose spin-off of Cypress Semiconductor, went public in one of the more successful technology IPOs of the year. The company's stock was offered at $18 and trades now at $27.

Roscheisen said Nanosolar decided to open a factory in the Bay Area, rather than in China or another developing nation, because being close to its R&D center in Palo Alto was important, and because labor costs are a relatively small part of the overall operation since so much is automated.

"I can't even remember the last time a major manufacturing facility opened here,'' said Carl Guardino, president and CEO of the Silicon Valley Leadership Group. "We would probably have to go back to the time of polyester suits and much wider ties.''

Environmentalists also were encouraged.

"Cleaning up the environment can be an economic opportunity,'' said Carl Pope, national executive director of the Sierra Club, in San Francisco. "We are going to need these kind of breakthroughs. It is wonderful that Silicon Valley is taking the lead and that it is happening here.''

This article was originally published by the San Jose-based Mercury News and reprinted here with permission from the publisher, Knight Ridder. For the Mercury News, see the following link.
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Reader Comments (8)
Adrian Akau
Date Posted:
June 24, 2006
It sounds very promising but what is the effiency of the cells and what will they cost?

The lower the efficiency, the greater the surface area needed for a given power and then more panels would be needed. Connection expenses and cell support (backing) costs (the modules are paper thin) also have to be added.
Comment 1 of 8
michael taylor
Date Posted:
June 25, 2006
This is only the begining.Once agian it is proven the will of the people brings results.Of course it will take expensive investments and a lot of trial and error, but solar power will be an important link in the chain of furture power generation.Inspite of our bungeling,short sighted president. The free market will provide.
Comment 2 of 8
Richard Molby
Date Posted:
June 25, 2006
This is a move in the right direction and it proves that private industry and not Federal assistance will get solar kick-started. I wonder if the firm also has plans to use some of its own output to help power itself and thus lower costs? In theory a solar production plant could become self sufficient if planned properly.
Comment 3 of 8
Chris Nelder
Date Posted:
June 26, 2006
Nanosolar says their efficiency is 9-11%, and their cost of manufacturing is about 1/10th the cost of traditional polysilicon cells. Likewise, 1/10th the cost for building a plant.
Comment 4 of 8
Date Posted:
June 28, 2006
Is this new production, new growth that has been unforeseen or does this fit in with the current industry projections of the expansion over the next decade?
Comment 5 of 8
peter segaar
Date Posted:
June 30, 2006
Solar Fabrik AG in Freiburg (Baden-Wuerttemberg, Germany) is the first industrial zero-emission factory producing solar cells.

I am delighted that U.S.A. is picking up the solar PV track and doing it with thorough means.

One aspect escapes me: life expectancy of the cited technology. "Paper thin" is good for resource efficiency, but may be a wild card when applied to buildings with extreme environmental constraints: extreme heat in summer, extreme cold in winter (especially in continental climates), hail, snow ballast, water, and, especially, the extreme fluctuations between these conditions in many "typical" climates in countries where these techniques will be applied in first instance.

Lots of succes, but remember that each technology has its drawbacks. Don't let these frighten you away from another promising development in one of the most sustainable energy technologies of the day: solar it must be, and solar it will be.
Comment 6 of 8
Christian Antal
Date Posted:
July 3, 2006
Interesting that they claim 450 MW, but still say that "its thin-film technology is not available for sale yet." To me their thin-film technology seems very immature. I believe they have to build _a pilot_ production line before they go all out, and have several ramp ups in production, probably 4 MW, 32, 128 etc.. so for 450 we're talking 2012-2015? NRELs 1GW plant vision is possible, but you really need a good technology, if something else comes along and just wipes you out, well.. you're in trouble - that's a lot of cash burned, even for the 'google' boyz. Anyway, wish them luck, this might just be the first large scale CIGS manufacturing plant.
Comment 7 of 8
Date Posted:
April 6, 2007
Even if manufaturing price is cut to 1/10 it does not mean that solar panels price will become 1/10 too.

If we cut down the panel price to 1/10 , it means $0.4 watt per. Let assume company makes 100% profit, even then it will take nanosolar to cell (100 Million/0.4) 250 Mega Watts of panels to recover just the invetment cost ??
I think the price of panels may go down by 50% at most.
Comment 8 of 8
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