Nanosolar, a privately funded solar energy company,
announced this week that it had secured 647,000 square feet of manufacturing
space in San Jose. This is noteworthy because a facility that size will have the
ability to produce an annual capacity of 430 megawatts' worth of solar power --
or three times the amount that is presently installed in the U.S.
If Nanosolar's technology can scale to this level, it could become a major
player in the solar industry. Moreover, because it employs a new thin-film
technology that uses little to no silicon -- the costliest part of solar cells
-- it might even allow it to become the dominant player in the field because the
technology is so disruptive.
To date, the company has received venture funding from
Google (NASDAQ: GOOG)
founders Larry Page and Sergey Brin, and this past summer it received an
additional $75 million to begin building this facility. (It also signed an
agreement with Coenergy, one of Europe's solar companies, in
August to help develop its technology.)
So, is Nanosolar's success guaranteed? No. For starters, many of today's
leading solar companies, such as BPSolar (NYSE: BP),
Kyocera (NYSE: KYO), and
SunTech Power (NYSE: STP), are all
continuing to produce more efficient silicon solar cells. As such, they are
unlikely to either be easily replaced or to go down without a serious fight.
Secondly, many of these companies, as well as Sharp,
EnergyConversion Devices' (NASDAQ: ENER)
Uni-Solar, Miasole, and Harris & Harris'
(NASDAQ:
TINY) portfolio company, Innovalight, are all in various stages of
developing their own thin-film technology which, in some cases, may be closer to
development.
And lastly, Nanosolar could encounter any number of bumps in ramping up its
thin-film technology -- which remains untested in a large-scale manufacturing
process.
Still, everything from the funding to the securing of the manufacturing space
seems to suggest that things are coming together nicely for Nanosolar. For this
reason, I believe it is a company that investors who are interested in solar
energy need to put on their radar screen.
I say this not because I believe it will go public anytime soon and would
represent a good buy (although it might), but rather because thin-film
technology is a disruptive technology and a facility of this size could cause
some serious problems for many of today's leading publicly traded solar
companies. After all, the sun has been known to burn people on occasion. There's
no reason that it can't do the same to investors.
Interested in other solar Foolishness?
Check out these articles:
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Fool contributor Jack Uldrich
always recommends using sunscreen when playing in the sun for more than 15
minutes. He owns stock in SunTech Power. The Fool has a strict disclosure
policy.
