Venture Capital Investment
The next generation of solar
Venture Capital Investment
Tim Chapman reviews venture capital investment in next generation solar
t’s well over a century since Charles Fritts, an And then there’s a whole new generation of more exotic
enterprising American inventor, found that a carefully materials, from organic compounds to nano-engineered
prepared cell of selenium and gold could create quantum wells, emerging from laboratories around the
electricity from sunlight. It’s 50 years since silicon-based world.
solar cells were used to power early satellites. But there’s Not all of these technologies will reach their promised
never been such a wave of technical innovation and potential, of course. Some will run into problems scaling
investment as there has been in the past few years, as the up production from laboratory to factory, some may never
climate change and energy security agendas have elevated become commercially viable because of high material and
solar power into the mainstream. production costs, and others may just not find their place
Venture capital (VC) activity can be a useful guide to the in a highly competitive market.
commercial potential of a technology. Last year, according The critical factor for many of these solar plays is the
to research by the Cleantech Group, VC investment in price of the high-quality silicon required for the most
solar technology topped $1 billion in 71 deals across North established PV technologies. Recent years have seen
America and Europe, as part of a record $5.18 billion huge price increases as the increasing demands of the
invested across the cleantech arena. And the numbers solar industry competed with those of the electronics
got even bigger in 2008: according to Greentech Media, industries. But with new production capacity coming
solar companies raised a total of $1.5 billion in the third on-stream, material costs are set to fall sharply - analysts
quarter of 2008 alone. at New Energy Finance have predicted a 43% drop in the
Part of that wave of investment is helping increase cost of polysilicon in 2009. While that’s good news for the
production of the mainstay of the solar industry, makers and users of silicon PV, it puts a big dent in the
photovoltaic (PV) panels based on crystalline silicon. But business case for some of the new solar technologies.
the bulk of the money is going to companies which are The following set of three articles introduces some
commercialising a vast array of new solar technologies. of the most exciting companies developing the next
Some companies are working to dramatically improve generation of solar PV, concentrating on those that have
the efficiency of silicon PV, to get more power out of less secured VC funding. The articles originally appeared
silicon, and to slash the cost of producing the cells. A key in Cleantech magazine between December 2007 and
trend here is the move away from bulky crystalline silicon May 2008, but have been updated with details of later
to thin films which use a fraction of the raw material. fundraising and other news.
Thin-film cells can also be made with alternative
semiconductors, such as cadmium telluride or the copper Tim Chapman is a business and technology journalist, who tracks cleantech VC at
indium gallium selenide (CIGS) family of compounds, www.cleanventures.co.uk
which have also seen intense VC interest.
7 exible super cell in module production. Image Dye Sensitised Thin Film solar cells. Heliovolt circular cell
courtesy of Odersun Image courtesy of G24i Image courtesy of Heliovolt
Venture Capital Investment
The next generation of solar 1
Improving silicon efficiency
The centre of innovation is California’s Silicon Valley
olar cells are an increasingly familiar improving silicon efﬁciency is to concentrate
sight, helping businesses and more light onto the PV cell. One of the
households cut their emissions and leaders in this concentrated photovoltaic
reduce their energy bills, and powering (CPV) ﬁeld is SolFocus. The Silicon Valley
a host of off-grid installations. But while ﬁrm uses reﬂective optics to focus sunlight
the conventional photovoltaic (PV) cell on a small, high-quality silicon cell,
technology is well established, it’s still achieving double the conversion efﬁciency
relatively inefﬁcient, awkward and expensive of silicon with a fraction of the material. The
to install, often unsightly, and demands a technology is currently being deployed at a
large amount of scarce crystalline silicon. 3MW installation in Spain. SolFocus, which
Making solar power cheaper, more raised $64 million venture capital in late
efﬁcient and more ﬂexible is the aim of a 2007, is also developing a new concentrating
host of new companies that are receiving system which aims to reduce production
intense interest from venture capital (VC) costs by integrating all the optical elements
investors. That’s a huge driver for technical into a single piece of glass.
and commercial innovation, and promises a Because they have to closely track the
strong portfolio of listed solar businesses a sun as it passes through the sky, CPV
few years down the line. installations are unsuitable for many
These three features look at the next applications. Several ﬁrms are instead
generation of VC-backed solar businesses, focusing on producing more efﬁcient cells
from companies now in commercial which can be used just like conventional
production to the latest spin-outs to emerge cells.
from the laboratories. This ﬁrst feature Solaria, another Silicon Valley ﬁrm,
focuses on companies working to improve promises to double or treble the efﬁciency of
the efﬁciency of silicon in solar cells. silicon use by the simple method of taking
Unsurprisingly, the centre of innovation one conventional cell and making two or
is California’s Silicon Valley. The technical three new ones from it. In 2007, the ﬁrm
skills learnt in the semiconductor industry raised a $50 million third round of funding
are now being applied to the solar sector, led by German solar giant Q-Cells, which is
with many companies managed and backed also supplying the ﬁrm with 1.35GW worth
by veterans of the IT industry. of cell material over the next decade.
Conventional PV cells depend on silicon Solaria takes standard crystalline Image, courtesy of Solaria
of a very high quality, although not quite as silicon cells and
high as that demanded by the semiconductor slices them into
industry. While early solar developers thinner strips
depended on scrap silicon from integrated using established
circuit manufacturing plants, there now just techniques from
isn’t enough scrap to go round. Growing the semiconductor
demand from both industries has sent the industry. These strips
price of polycrystalline silicon skyrocketing are then alternated with
in recent years, although new supply troughs of low-cost plastic, and
capacity should soon bring the price back packaged in a multi-layered
down. Because silicon makes up the bulk cartridge which acts as a solar
of the cost of cells, its cost has pushed up concentrating cell. The ﬁrm
the price of new solar installations despite estimates that the production
manufacturing economies of scale and technique can cut the cost of
improvements in conversion efﬁciency (i.e. conventional PV modules by
the efﬁciency with which the cell converts 15-30%.
photons into useable power). Although the efﬁciency gains
A relatively well established approach for are lower than those promised by
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other innovations, Solaria’s
solution should be much
easier to integrate into existing
production lines, and the
ﬁnished cells can be used in
the same way as traditional PV
cells. The ﬁrm is moving towards
commercial production at both its
California base and a 25MW line in
A younger rival, Silicon Valley
Solar, also aims to double silicon
efﬁciency through its proprietary
internal concentrator design. Its
modules are outwardly similar to
conventional modules, so can easily
be installed or integrated into existing
systems. The ﬁrm raised a $10 million
ﬁrst round in 2007, and is developing
a 2MW production line at its California
Advent Solar, another innovative US cell
manufacturer, raised over $70 million in a
fourth round in 2007. Advent uses ultra-thin
silicon wafers in a cell design, developed at
Sandia National Laboratories in the mid-
90s, known as ‘emitter wrap-through’. These
cells have all the infrastructure at the back,
improving efﬁciency by area and simplifying
assembly. Advent also says the cells are
Advent is already shipping product from
its 25MW production line in its native New
Mexico, and signed a 250MW supply deal
with European partners in September 2008. Image, courtesy of SV-Solar
Opened in early 2007, the factory also aims
to cut waste through lean manufacturing
principles. facility, with commercial production
Other ﬁrms are taking silicon beyond scheduled to begin in late 2009.
the crystalline cell and into the emerging Another promising Silicon Valley ﬁrm
thin-ﬁlm arena. Thin-ﬁlm PV promises is Solexant, which raised a $4.3 million
substantially lower material costs and ﬁrst round in September 2007. The ﬁrm is
increased ﬂexibility, replacing conventional developing nano-structured materials which
solar panels and opening up new markets can harvest infra-red light that conventional
and applications. Although many thin-ﬁlm silicon doesn’t respond to. Combining that
companies are working with other materials, with thin-ﬁlm silicon can dramatically
others are exploring new forms of silicon. increase efﬁciency by capturing more energy
One of the most commercially advanced from the same light.
is another Silicon Valley ﬁrm, Innovalight. Xunlight (formerly MWOE Solar) is a
Based on research from the US Department spin-out from the University of Toledo. It
of Energy, Innovalight has developed a is commercialising thin-ﬁlm technology
proprietary ink containing silicon nano- which adds a little germanium to the silicon
crystals, or ‘quantum dots’, which have a to achieve record-breaking conversion
substantially higher efﬁciency than silicon efﬁciency. The ﬁrm raised a $22 million
wafers. The ink can be printed directly onto second round in May 2008 and is working
a substrate, to produce ultra-thin solar on a 100KW pilot production line.
modules for residential and commercial Thin-ﬁlm silicon faces tough competition
use, potentially at a tenth of the cost of from ﬁlms based on other materials,
conventional cells. including cadmium telluride and the
Innovalight raised a £28m third round in compound semiconductor known as CIGS.
late 2007, and secured further government In the next article, we’ll look at the most
funding in September 2008. The ﬁrm is exciting businesses taking solar power
developing a major new manufacturing beyond silicon. CT
Venture Capital Investment
The next generation of solar 2
Thin-film PV - CIGS and CdTe
Thin-ﬁlm cells can be more ﬂexible in their applications and,
depending on the substrate, physically more ﬂexible.
hile many solar cell manufacturers to fall to $1 per Watt peak (Wp, a measure
are struggling with the rising of optimum output) by 2010, half that of
cost of silicon, others are reaping monocrystalline silicon and less than all
the beneﬁts. For the new generation of other silicon-based tech. More power per
companies developing photovoltaic (PV) dollar means than thin-ﬁlm is forecast
cells based on alternative materials, high to make up 20% of the total PV market
silicon costs can only increase demand for by 2010, up from around 8% today, and
their own products. potentially dominate the industry by 2020.
The most advanced alternatives are in That’s made thin-ﬁlm very attractive for
thin-ﬁlm technology. Thin-ﬁlm PV has venture capital investors. Investment rounds
a lower material cost than traditional have tended to be large, as they have to fund
crystalline silicon cells as it typically uses purpose-built manufacturing facilities. Firms
just one per cent as much semiconductor which have secured funding are nearly all
material for the same output. in the US, with many around Silicon Valley
There’s other beneﬁts too. Thin-ﬁlm cells - even though they’re not using silicon, their
can be more ﬂexible in their applications manufacturing methods are often based on
and, depending on the substrate, physically techniques from the ICT industry.
more ﬂexible. Solar panels can be wrapped Texas-based HelioVolt closed a massive
around different structures and, because $101m second round in October 2007. The
the PV ﬁlm can be applied to range of base money goes towards opening Heliovolt’s
materials, can be integrated into buildings, ﬁrst plant, with the initial capacity to
vehicles or even clothing. produce 20MW worth of cells a year. The
Several different semiconductors can ﬁrm’s production technology prints the
be used in thin-ﬁlm PV. In the last issue, CIGS-based thin ﬁlm directly onto a range
we introduced some silicon-based thin of materials, although initial production
ﬁlm developers. But two other materials is concentrated on glass. HelioVolt’s core
are drawing most attention - the copper market is the construction industry, where
indium gallium selenide (CIGS) family; and its ﬂexible production process allows cells to
cadmium telluride. be integrated into the building itself.
Thin-ﬁlm developer HelioVolt calls CIGS Thin-ﬁlm production lends itself to a
“nature’s best solar-absorbing material”. range of manufacturing methods, including
Actually, it’s not as effective as crystalline direct printing, sputtering, vapour and
solar in capturing energy from sunlight. plasma deposition on a
PV modules based on silicon have a net variety of rigid or ﬂexible
efﬁciency of around 18 per cent, while substrates. Many companies
current CIGS modules have a net efﬁciency are experiencing problems
of only up to around 12 per cent. That’s and delays in moving to full-
forecast to approach 14 per cent as full-scale scale commercial production,
production allows improved deposition and however.
encapsulation technology, but it still lags One of the ﬁrst CIGS
silicon. developers to begin large-scale
CIGS does perform better in low-light or production is California-
low-angle conditions, however. It also has an based Nanosolar, which
advantage over other semiconductors in that started production in late
its performance isn’t as sensitive to the exact 2007. The ﬁrm’s San Jose
concentration of its constituent elements, facility, previously owned by
giving more tolerance and ﬂexibility in IT giant Cisco, is thought to Nano solar energy panel.
manufacturing. be the world’s largest solar cell factory. It’s Photographer:MARK THIESSEN/National
But its big advantage is in cost. The also developing the world’s largest panel- Geographic Image Collection
production cost of CIGS modules is forecast assembly facility near Berlin, Germany.
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Image: Mehran Sadeghi, a senior
scientist at Prime Star Solar,
measures a solar cell’s e ciency
Nanosolar is one of the best-ﬁnanced industries - leading developer First Solar,
companies in the solar arena, most recently for instance, sources its cadmium from zinc
raising a $300 million strategic equity round smelting waste.
in August 2008. The ﬁrm uses a continuous Arizona-based First Solar is one of the
roll-to-roll process, printing a CIGS elders of the thin-ﬁlm world, forming in 1999.
nanoparticle ink onto low-cost aluminium The ﬁrm ﬂoated on Nasdaq in early 2007,
foil. The metal substrate removes the need and is now on track to hit its target of 1GW
to deposit a separate electrode layer, as annual production from its plants in the
is needed on glass, while the roll-to-roll US, Germany and Malaysia. Its production
printing allows high throughput. process uses high-speed vapour transport
Another San Jose ﬁrm, SoloPower, is also deposition onto glass.
developing a roll-to-roll manufacturing German solar giant Q-Cells is also
process. The ﬁrm says its electroplating investing in CdTe technology, acquiring
production technique, borrowed from the Ohio-based Solar Fields in November
semiconductor industry, is signiﬁcantly 2007 and merging it with its own Calyxo
more cost-effective than other methods. subsidiary. Solar Fields also uses vapour
SoloPower raised a $30m second round in deposition technology, which it had
July 2007, and is also supported by the US previously licensed to Q-Cells. Calyxo is now
Department of Energy. working on a 60MW production line.
Still in California, Miasolé is also gearing Colorado-based AVA Solar meanwhile
up for commercial production. Miasolé raised a $104m second round of venture
raised $50m in a fourth round in September investment in September 2008, to fund its
2007 and is currently raising a further new 200MW factory. The ﬁrm has developed
round of some $200 million. Headed by a a continuous high-throughput process for
seasoned management team from the hard manufacturing CdTe-based cells with a
disc industry, Miasolé uses a proven high- conversion efﬁciency of around 12 per cent.
throughput sputtering technique to deposit Early-stage CdTe developers are also
CIGS onto a stainless steel foil. The ﬁnished winning investor interest. Georgia-based
modules can weigh less than a ﬁfth as much PrimeStar Solar raised an undisclosed round
as glass plate modules, and can be integrated from GE Energy in June 2008, with the
into building materials. engineering giant taking a majority stake in
The other thin-ﬁlm material winning the company. The ﬁrm is commercialising
serious attention is crystalline cadmium CdTe technology developed at the US
telluride (CdTe). CdTe offers a similar National Renewable Energy Laboratory
module efﬁciency to CIGS but potentially which has achieved a record 16.5 per cent
an even lower cost, forecast to reach around cell efﬁciency, and is currently developing a
$0.80/Wp by 2010. Like CIGS, it’s effective pilot manufacturing plant for its deposition
in low light situations, and also copes well in technology.
high-temperature environments. Meanwhile, other ﬁrms are developing
Cadmium is an extremely toxic heavy thin-ﬁlm PV based on other semiconductors,
metal in its raw state, but solar developers including novel copper-based compounds,
take pains to ensure production and titanium dioxide, and organic polymers. In
use of their products remain thoroughly the next article, we’ll look at these and other
environmentally friendly. Using cadmium businesses leading the third generation of
as an input can reduce waste from other solar power. CT
Venture Capital Investment
The next generation of solar 3
Third generation materials
Companies are developing new kinds of solar cell based on a
variety of more exotic materials.
t’s a happy fact of chemistry that solar scale installations and building-integrated
cells can be built from a wider variety systems, to personal items such as the solar
of materials than many people might bags it is developing with Berlin-based
realise. The vast majority of photovoltaic Bagjack.
(PV) panels now on the market are based The ﬁrm is currently building its ﬁrst
on silicon - and, as we’ve seen, there’s commercial-scale (30MW) factory in
a plethora of companies working to get eastern Germany, with the aid of a Euro21
more power out of that semiconductor million public grant. Odersun has also been
by developing new cell conﬁgurations or successful in attracting venture capital, with
by using silicon in thin ﬁlms. Other ﬁrms a Euro40 million second round in February
are developing thin ﬁlm cells based on 2008 from investors including Doughty
copper indium gallium selenide (CIGS) Hanson and Virgin Green Fund.
semiconductors or cadmium telluride. Other solar ﬁrms are working with very
There’s also a third set of companies different materials. Technologies which have
which are developing new kinds of solar cell secured investor interest fall into two broad
based on a variety of more exotic materials. categories - organic materials, and III-V
Each of these technologies presents its own compounds.
beneﬁts and challenges in terms of cost and The most advanced company in the
conversion efﬁciency, but all promise to take organic space is Konarka, originally a spin-
solar power into new arenas. out from the University of Massachusetts.
Not all of these materials are radically Konarka is developing what it calls ‘Power
different. Odersun, a German solar Plastic’ - a lightweight, cheap and versatile
developer which was recently picked as solar cell manufactured by direct printing.
Europe’s hottest private cleantech company, The photovoltaic capability depends on
is developing thin ﬁlms based on copper nanoparticles of titanium dioxide coated
indium disulphide, a compound that is with an organic dye similar to those used
chemically similar to the CIGS family. in some LED displays. These particles are
Odersun prints its semiconductor onto printed in a continuous reel-to-reel process, Image: Four cell production at
centimetre-wide copper tape, a technology onto a thin plastic ﬁlm along with electrode Odersun AG
it calls CISCut, in what it claims is the layers made of semi-conductive polymers.
industry’s fastest reel-to-reel production Light is absorbed by the dye, which excites
process. Applications range from utility- electrons out of the titanium dioxide and
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into the electrodes, producing an electric Euro1 per peak Watt, on par with the aims
current. of CIGS developers. The ﬁrm has secured
The conversion efﬁciency is low, at around funding and research support from BASF
ﬁve per cent compared with around 10 per and Bosch, as well as VC investment.
cent for CIGS and up to 18 per cent for University spin-out companies are also
silicon. The production costs are low enough pioneering a relatively untested area for
to compensate, however - the cost per watt solar tech - the III-V semiconductors,
output is around a ﬁfth that of traditional named for the positions in the periodic table
silicon PV. of the compounds’ constituent elements.
Konarka is supported by some major VCs, Common III-V compounds include gallium
including 3i and cleantech stalwarts Good arsenide (GaAs) and indium phosphide
Energies and Draper Fisher Jurvetson. The (InP), substances which are also used in the
ﬁrm has also secured government support, optoelectronics industry.
including funding from the US Department These materials can potentially make
of Defense. The US military is a major highly efﬁcient solar cells. The problem is
customer for Konarka, which is already that the semiconductor crystals need to be
supplying portable battery chargers to the extremely pure, so cells have very high costs
Army to keep the modern soldier’s multiple of production. The materials are also heavier
devices fully charged, and materials for and mechanically weaker than silicon.
portable military buildings to the Air Force. The key to tapping their potential may
Cleantech and the military might be an lie in quantum wells. Despite sounding like
uneasy mix for some, but the technology something from science ﬁction, quantum
has far wider applications. Power Plastic wells are a well-established technology used
could bring great beneﬁts to developing in lasers and low-noise electronics such as
countries and areas with limited power infra-red imagers. When constructed with
infrastructure, while domestic applications III-V crystals, quantum wells can effectively
range from construction materials to be tuned to reap the maximum energy from
consumer items. incident light, while using a tiny amount of
Konarka is itself a shareholder in Cardiff- the semiconductor.
based G24 Innovations, which holds the QuantaSol, a spin-off from Imperial
European manufacturing rights for the College London, is developing what it
same TiO2 nanoparticle technology. G24i is calls a stress-balanced quantum well.
developing a range of products for consumer This uses a mix of GaAs and other III-V
and business applications, and secured compounds to absorb the maximum light
£50 million in summer 2008 to expand its energy while being more stable than
manufacturing facilities. single-compound crystals.
Other companies are working on Following a £1.35 million seed round
improving the conversion efficiency in 2007, QuantaSol secured £500,000
of organic materials. Heliatek, a new follow-on funding in April 2008 after
company spun out from the Technical demonstrating conversion efﬁciencies of 27
University of Dresden and University of per cent with a single-junction cell. This was
Ulm in 2006, is developing new organic achieved with light equivalent to 500 suns,
materials and production techniques which means the cells should be ideal for use
which it says can significantly improve in solar concentrating installations which
efficiency and cut costs. use optics to focus a large amount of sunlight
In its ﬁrst, pre-production, phase of onto a relatively small PV cell. The ﬁrm aims
development, Heliatek is aiming to achieve for 35 per cent efﬁciency in a multi-junction
conversion efﬁciencies of 8-10 per cent and cell before the end of the year.
to prove its reel-to-reel production process. SunFlake, spun out from Copenhagen
The ﬁrm’s organic semiconductor is very University last year, is also aiming for
thinly deposited in this vacuum process, conversion efﬁciencies of 30 per cent
with one gram covering a square metre of and above. The ﬁrm is developing solar
solar cell. cells based on a III-V semiconductor
NanoFlakes - a perfect crystalline structure
Heliatek is aiming to reduce costs to below nanostructure called ‘NanoFlakes’ which
Picture courtesy of SunFlake
lead researcher Martin Aagesen has called ‘a
perfect crystalline structure’.
These crystals act as a quantum well when
printed onto a low-cost silicon substrate.
Initial work has involved indium arsenide,
but the same technique can potentially be
used with range of III-V compounds.
These quantum well technologies are still
years away from commercialisation, and the
complex nanostructures mean that they’re
unlikely to ever match the production speed
of the thin-ﬁlm technologies, but they might
still play an important role in the future of
solar power. CT