Solexel Grows Cheap Solar Cells Using Silicon Gas
Solar ETFs have been on a tear since the beginning of 2013 with the Guggenheim Solar ETF (NYSEARCA:TAN) having returned over +120% to date. However, investors who would have bought and held this same ETF when it debuted in April of 2008 to the present day would have paper losses of -84%, even with the benefits of diversification that ETFs offer.
Venture capitalists are even more gun shy with private companies such as Konarka, the solar cell manufacturer which was co-founded by a Nobel laureate and took in $200 million from the likes of Total, Chevron, and Draper Fisher Jurvetson, having declared bankruptcy in 2012 with almost no salvageable value. One private solar cell manufacturer with strong backing and a follow on round of funding announced just today is Solexel.
Founded in 2007, Milpitas, California-based Solexel has developed a unique process to manufacture high-efficiency solar cells at a low cost. While many other companies make this claim, Solexel seems to have validated their claim with strong backing from a broad base of notable investors including SunPower (NASDAQ:SPWR) who invested in Solexel several years ago. In 2012, Solexel received $25 million for the production of a pilot plant in California with further plans to build a large scale production plant on a 100-acre lot in Malaysia. The funding round announced today of $31 million included Kleiner Perkins Caufield & Byers, Technology Partners and DAG Ventures bringing the company’s total funding to $200 million.
The creation of silicon wafers which are used to make computer chips involves the following process:
A silicon wafer acts as a base for chips or chips are embedded in the wafer, both methods of which allow for the creation of semiconductors that brought us the age of computing. The problem with the method of growing silicon and then carving it into wafers is mainly the defects that can occur curing the creation of the wafers and the high level of waste involved in the overall process. The below excerpt from an article on optics.org explains how Solexel’s process differs:
Solexel’s disruptive approach relies on epitaxy, the technology that is used by LED manufacturers to deposit the thin layers of light-emitting semiconductor materials onto wafer substrates that are then diced into individual chips. Epitaxy is, in essence, crystal growth using gas-phase chemistry, and in the Solexel process the key material is trichlorosilane gas.
The Solexel patented process grows the silicon wafers using an additive process (like 3D printing) as opposed to the subtraction process currently used in the silicon industry today.
According to an article by Bloomberg last year, Solexel’s Malaysian production facility will start with a 200 megawatt-a-year production line that is expected to cost $275 million with the entire project requiring an investment of $930 million. With those hefty capital needs, Solexel may look to obtain their additional funding through an IPO, an exit event which would also allow current investors who have been in it for the long haul realize some profits on their initial investment.
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