Nanosolar Rides Solar Thin-Film Wave To $300M Round
Last update: 8/27/2008 11:48:07 AM
By Jonathan Shieber
Of DOW JONES NEWSLETTERS
NEW YORK (Dow Jones)--A second wave of venture-backed photovoltaic technologies is poised to make its mark on the growing solar industry, and Nanosolar Inc., which raised more than $300 million in its most recent financing, may be leading the way.
The Palo Alto, Calif., company is using the capital for a massive build-out of its manufacturing capacity in both Palo Alto and Berlin, according to an email from Nanosolar Chief Executive Martin Roscheisen.
"In March of this year we closed a major strategic equity financing as part of which we aligned with several of the world's leading power producers to jointly execute on utility scale solar," Roscheisen wrote.
(This story also appeared in Clean Technology Investor, a newsletter and information service published by Dow Jones & Co.)
Nanosolar will have 430 megawatts of available cells in its San Jose, Calif., plant and another 620 MW in Berlin after the completion of its first phase of construction.
"We have a plan of expanding production at these sites to more than a gigawatt in a subsequent phase," Roscheisen wrote.
Investors in the massive private equity financing include Greenwich, Conn.-based Lone Pine Capital LLC, a hedge fund whose long investment portfolio is worth $8.6 billion, and Paris-based EDF Energies Nouvelles SA (EEN.FR), an independent renewable energy power producer, according to Roscheisen and a previous announcement from EDF.
Sources with knowledge of the investment said additional backers in the round include AES Solar, the $1 billion joint venture of independent power producer AES Corp. (AES), and multibillion-dollar energy buyout investor Riverstone Holdings LLC (AP4.SG). Sources said buyout firm Energy Capital Partners, which owns the San Francisco-based utility scale solar power project developer NextLight Renewable Power LLC, also participated in the financing.
Neither AES Solar nor NextLight returned requests for comment. Energy Capital Partners and Riverstone declined to comment about their involvement in the round. Roscheisen declined to confirm additional investors.
"The financing is basically just a side effect of the strategic partnership conversations we have had based on our focus on solar utility power, the interest of our partners to scale availability from us even more aggressively, and the ready access to capital that they have to help us execute on this," Roscheisen wrote.
Nanosolar's thin-film technology presents an attractive alternative to traditional polysilicon-based solar cells because it uses a variant on the photovoltaic material called copper indium gallium selenide, or CIGS.
Many venture-backed start-up companies have raised millions of dollars to bring CIGS cells to market because they reportedly can convert more sunlight into electricity than other types of thin-film materials. At Nanosolar the company has managed to achieve efficiencies of 14.5% with its process.
Earlier this year the stealthy Roseville, Calif.-based thin-film manufacturer Solyndra Inc. quietly announced that it had signed over $1.2 billion in supply contracts. That company is currently out on the fund-raising trail looking for $350 million in new financing. News of that financing was earlier reported by Greentech Media.
Meanwhile Intel Capital-backed Sulfurcell Solartechnik GmbH, a Berlin-based thin-film manufacturer, has raised $130 million to build out its own capacity, and Santa Clara, Calif.-based Miasole is in the process of wrapping up a $220 million round for its own expansion plans.
At the same time, there are publicly traded makers of CIGS-based solar cells like DayStar Technologies Inc. (DSTI), listed on Nasdaq. It's building a 25-megawatt line in California and has a market capitalization of just $107.8 million. Ascent Solar Technologies Inc. (ASTI), also trading on the Nasdaq, has a market cap of $164 million.
Fanning the flames of investors' desire to back start-up solar thin-film companies is the success of publicly held First Solar Inc. (FSLR).
The Phoenix thin-film solar manufacturer uses a different material composition based on a combination of cadmium and telluride for its cells. As the first thin-film solar to make it to the public markets with a low-cost manufacturing process, First Solar has been rewarded with a $21.8 billion market capitalization.
According to a recent institutional research report by the Stanford Group, First Solar has the lowest cost per watt in the industry. First Solar can manufacture cells at a cost per watt of $1.14, which is less than half that of the average crystalline silicon cost per watt.
Even as the start-ups surge on the strength of new capital, silicon manufacturers also are beginning to diversify into thin-film technologies.
Low-cost silicon photovoltaic manufacturer Suntech Power Holdings Co. (STP) has said that it will build a 50-megawatt thin-film production line in the second half of the year, according to the Stanford Group report, and SunPower Corp. (SPWR) may soon follow Suntech Power's lead, the report said.
"First Solar has made it all too clear by now to everyone - after the usual cycle of disbelief and denial by the legacy competitors - that thin films can be in a different world of cost efficiency relative to wafered silicon and other conventional solar technologies, and that this enables a very profitable and scalable business," Roscheisen wrote.
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