Nanosolar said Friday that it has signed an agreement with Conergy to develop large-scale solar power systems using thin-film technology.

That’s a coup for Nanosolar, a Red Herring 100 company, because Conergy is the world’s largest solar-electric system integrator. Its IPO was the second-largest in tech last year (see Big Deals: IPOs).

“Conergy [is] throwing its vast systems expertise and distribution expertise behind Nanosolar’s ultra-low-cost cell technology,” said CEO Martin Roscheisen.

Conergy didn’t return calls by press time.

Under the agreement, Nanosolar and Conergy will develop a new solar-electric system design and a new panel design that will work together in a “highly coordinated and very unique way” to produce the cheapest solar power yet, he said.

Solar power is attracting plenty of attention as companies with new technology try to grab a piece of a market that CLSA Asia-Pacific Markets analyst Michael Rogol expects will grow from $12 billion in 2005 to $19 billion in 2006, $39 billion in 2008, and $72 billion in 2010 (see Solar Energy’s Bright Future).

Thin films are promising because they use little to no silicon—an advantage since the high-grade silicon needed for PV is scarce. Even without today’s shortage, silicon has been the costliest part of a traditional cell. And light, flexible thin films could tap into lucrative new applications like consumer electronics and clothing (see Solar’s Going Thin).

They have historically proven difficult and expensive to manufacture on a large scale, less efficient at converting sunlight into electricity, and short-lived. But startups with new technologies believe the problems can be overcome, and the potential is great.

Fat Savings from Thin Films?

Still, most other companies developing thin-film solar technology are focusing on smaller applications to take advantage of the thin nature of thin films.

Why take a thin technology big? Nanosolar says it’s about savings, not size.

“Thin films are necessary because large-scale deployments with silicon cells are already not economic any more,” Mr. Roscheisen said, adding that the collaboration will result in the first solar power systems that can produce electricity at the same price as peak power from the electrical grid.

Nanosolar has a thin-film technology that it claims is 10 times as cost-efficient as traditional cells, and a printing-based manufacturing technique that it says will bring the price down to less than a dollar per watt, competitive with natural gas and peak electricity prices (see 10 Cleantech Companies to Watch: Nanosolar).

The company raised eyebrows in June when it raised $75 million from some big names in the industry, an amount the startup said would actually be worth $100 million when combined with government subsidies (see Nanosolar Gets $100M for PV). Incidentally, the investors included Grazia Equity, an original backer of Conergy.

Nanosolar had previously raised $20 million in venture capital and $10.5 million in grants (see Nanosolar Raises Funding).

Competition

Nanosolar isn’t the only company working on thin films, of course.

Many other thin-film startups, including Innovalight, Konarka, Miasolé, and HelioVolt, have also received funding in the last year (see Nano Solar Firm Gets Funding, Konarka Raises $20M in Funds, Energy Innovations Gets Cash).

In February, Royal Dutch Shell sold its crystalline silicon business to SolarWorld, choosing to focus on thin-film technology instead. In December, Honda Motor said it will enter the thin-film business and mass-produce cells by 2007.

And Ron Kenedi, head of North and South American operations for Sharp, the No. 1 solar manufacturer, told Red Herring he sees thin films becoming mainstream in two to three years (see Sharp’s Key to Success in Solar).

But Rhone Resch, president of the Solar Energy Industries Association, indicated that Nanosolar does have a chance at taking thin technology big.

“What you have is a very innovative cell manufacturer who is partnering with a very innovative system integrator and module designer,” he said. “My guess would be that they will come up with a very innovative and cost-effective product.”

Contact the Writer: jkho@redherring.com

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