Vow of lower solar costs attracts venture capital
Two Silicon Valley solar cell start-ups, both at the brink of
delivering more cost-effective technologies to the red-hot solar
market, have raised fresh war chests of venture capital.
Nanosolar of Palo Alto has raised $20 million from a group of
investors led by the Menlo Park firm Mohr, Davidow Ventures.
Miasolé of San Jose has raised $16 million in a round led by
Menlo Park's Kleiner Perkins Caufield & Byers.
The fundings are significant because these companies promise to
bring down the cost of solar cell technology, which remains relatively
expensive compared with more traditional sources of electricity.
The timing is good, too. As oil prices have gone up and other energy
sources remain limited, nations are increasingly searching for safe,
reliable long-term sources of power. Solar energy is long-lasting,
going years without cells needing replenishment. Moreover, existing
solar cell manufacturers have been slow to ramp up supply. Demand,
meanwhile, has soared -- fueled by government subsidies to support the
Both Nanosolar and Miasolé say they've made their technology
breakthroughs, and the challenge now is to produce in bulk to minimize
They were able to reduce costs by eschewing the traditional reliance on costly silicon.
Solar companies rely on the same photovoltaic process: Sunlight in
the form of photons hits a light-absorbing semiconductor material in
the solar cell, exciting electrons and creating an electric current.
But Nanosolar and Miasolé have shed silicon as their
semiconductor material -- its crystal form is bulky and inflexible.
Instead, they're using a copper alloy,
copper-indium-gallium-diselenide, that can be deposited on more
flexible material -- transforming bulky solar panels into thin foils.
Venture firms are enthusiastic, and Miasolé, in particular,
has drawn attention -- already producing cheap, high-quality hard disks
for disk drives, which Chief Executive David Pearce used at a previous
optical components company.
Big-name firms Kleiner Perkins and Mohr Davidow both sought to
invest in Miasolé, according to Pearce. Pearce took funding from
Kleiner Perkins. Mohr Davidow, in turn, invested in Nanosolar, which is
using a slightly different, unproven process.
Still, the two look neck-and-neck in delivering their product. Last
year, Miasolé's Pearce predicted his would be available during
the first quarter of this year. He has taken his first orders, but now
plans to make his first delivery next month: ``Honestly speaking, it
has taken a little longer to get the bugs out,'' he said.
Still, the market won't go away anytime soon. Large solar cell
wholesalers are struggling to ensure supply of solar cell modules, with
BP Solar saying it is 70 megawatts short -- the equivalent of about
$250 million in revenue. ``That's the magnitude of the demand issue
we're looking at,'' Pearce says.
He aims to sell his technology to large energy companies like
General Electric, PB Solar and Mitsubishi, he says. Like Nanosolar,
he's focusing on installing solar cells on the rooftops of large
commercial buildings -- where companies are more likely to embrace
cheaper power options more swiftly.
Nanosolar, meanwhile, says it will test its product at three
customer sites in California this year, and will deliver more broadly
Chief Executive Martin Roscheisen has focused his efforts on
assembling a proven management team, including recent hires Chris
Eberspacher, former head of R&D at ARCO Solar/Siemens Solar, the
world's largest solar producer; and Werner Dumanski, who had experience
manufacturing thin-film disks at Hitachi/IBM.
Roscheisen, who sold Internet company eGroups to Yahoo for $432
million in 2000, has also built up partners in Japan and Germany -- the
two largest existing markets for solar cells.
Another Nanosolar investor is Japanese engineering conglomerate
Mitsui, which Roschiesen says will help in accessing that market.
Mitsui has sold Sanyo-produced solar cells to the U.S. market, but
Roschiesen says they'll soon be doing the reverse. ``They'll be
bringing solar cells from California to Japan,'' he says confidently.
Onpoint, the U.S. Army's venture fund, and previous investor, Benchmark, also participated in the Nanosolar investment.