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1366 Brings Solar to the Masses

In an earlier article highlighting Brightsource, we discussed just how well solar ETFs have performed year-to-date  with Guggenheim Solar ETF (NYSEARCA:TAN) and Market Vectors Solar Energy ETF (NYSEARCA:KWT) being the two best performing non-leveraged ETFs in 2013. Just several months later, solar ETFs have risen even more dramatically with TAN up 155% while KWT has advanced 127% year-to-date. One exciting startup that is looking to make solar energy widely affordable to the masses is 1366 Technologies.

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About
In May of 2008, MIT spin-off 1366 Technologies secured their first funding round of $12.4 million led by North Bridge Venture Partners and Polaris Venture Partners with the stated goal of making solar generation as cheap as coal-based energy by 2013. Since then the company has secured $64 million in financing to include a $3 million grant from the US Department of Energy and a $150 million loan guarantee to build a second, 1,000 MW U.S.. manufacturing facility. 1366’s latest round of funding was closed just several weeks ago and led by Japan’s largest producer of ultra-pure silicon, Tokuyama Corporation who is also a strategic partner of 1366. 

Technology
Silicon wafers account for about 50 percent of the cost of making solar panels, so reducing the costs of wafers can lead to much cheaper solar electricity. The company’s manufacturing process is so efficient that its equipment will only need about a quarter of the space of the more conventional machines. With traditional manufacturing processes, 50 percent of the silicon can go to waste during production. 1366 eliminates this waste by making wafers directly from molten silicon which is similar to making sheets of glass. The Company claims that this process can cut manufacturing costs by as much as 80 percent. With manufacturing innovations in silicon decreasing costs by 10% per year through 2020, 1366 claims that 7 years from now the process will be cheaper than coal. The industry standard cell efficiency of 15% where solar becomes economically viable has been bested by 1366 having achieved cell efficiencies of 17.2% in customer trials of their DirectWafer product.
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Progress
In an article published by GIGAOM in 2011, the company stated their intent to begin shipping wafers in 2013. In January 2013, 1366 celebrated the opening of a new 25 megawatt wafer manufacturing facility in Bedford, Massachusetts. The 42,000 square foot factory will employ 100 people. The Company was said to be scouting a location for their new 1 gigawatt production facility earlier this year funded by their DOE loan. For public investors, 1366 may remain out of reach. In an article published by Renewable Energy World in May of this year, when asked about an exit strategy the CEO emphatically stated the Company’s strategy was not about an exit. Nonetheless, this exciting company which has now stated they are cash flow positive merits watching going forward.

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