Intel Capital Deepens Its Solar Bet on Sulfurcell

While venture capitalists have been bemoaning the challenges of investing in solar hardware makers (lots of time and money), investors still seem willing to pour additional money into companies that have hit technology milestones. Sulfurcell, for one, announced Monday that it’s gotten €18.8 million ($25 million USD) from investors including Intel Capital (s intc), and Climate Change Capital, to produce and market its second-generation thin-film solar panels.

The German company plans to use the equity funding to expand production of its solar panels that use the next-generation material — copper, indium, gallium and selenium (CIGS) — as the semiconductor to convert sunlight into electricity, said Nikolaus Meyer, CEO of Sulfurcell.

Sulfurcell makes both solar panels from copper-indium-sulfide (CIS) and CIGS panels, and its CIS panels have an average efficiency of around 8 – 9 percent, Meyer said. The CIGS panels, in comparison, should be able to convert 11 – 12 percent of sunlight that hits them into electricity.

The company is already shipping its CIS panels, and plans to start shipping its CIGS thin-films by the end of the month, though it hasn’t disclosed customers’ names. Sulfurcell hopes to start shipping panels with 14-percent efficiency in 2013.

Sulfurcell has taken some time to reach mass production. The  company was founded in 2001 as a spinoff of Helmholtz Centre for Materials and Energy (formerly called the Hahn-Meitner Institute), and started shipping the first panels from a pilot line in 2005. Its early investors included Vattenfall Europe and GdF Suez.

The Thin-Film Solar Market

Thin-films are solar panels that use little or no silicon for sunlight-to-electricity conversion. Most of the solar panels on the market today rely on silicon. Thin-film technologies promise to deliver cheaper products at comparable efficiencies, but they typically can only do that if they are produced at large scale. Many of them are small, with less than 100 MW of annual production capacity, while some of their peers that use silicon have hundreds of megawatts of factories.

Developing the process to make CIGS panels was a milestone for Sulfurcell and a key reason for the new funding from many existing investors including Intel Capital, Climate Change Capital Private Equity and Bankinvest Group, Meyer said. Sulfurcell raised €85 million ($135 million USD) in 2008 to nail down the CIGS process, and was able to show a 12.6 percent panel from its lab last year. The company has raised about $175 million since its inception.

Despite two decades of investment experience, Intel Capital is finding out what other VC firms have come to realize: Picking solar winners is difficult. Intel Capital spun out silicon solar cell maker Spectrawatt in 2008, and back then, the company raised a $50 million round with backing from Intel Capital, Cogentrix Energy, PCG Clean Energy and Technology Fund, and Solon. But as of last month, SpectraWatt was planning to lay off 117 workers and close its factory,

Solar Innovation

Sulfurcell’s factory can currently produce 35 MW of CIS panels, plus 5 MW of equipment to add selenium to make CIGS panels, Meyer said. By the end of this year, Sulfurcell should have 20 MW of equipment for making CIGS panels, and plans to produce 75 MW annually, he added.

The company has set up a U.S. office and expects to get the proper certification for the U.S. market later this year. Its customers include the Prime Group in India and an unnamed Chinese company that last year inked a deal to buy more than 10 MW of panels.

Sulfurcell has designed its own equipment for depositing the semiconductors: a choice Meyer said has enabled his engineers to better control the thickness and uniformity of the materials. These two goals are particularly difficult to achieve for the CIGS process, primarily because of the number of materials involved. Competing thin-film technologies use one or two materials.

One thing that makes CIGS attractive is that the most efficient CIGS panels that have been produced, in labs of course, command higher efficiencies than the best lab-made thin-films that use the alternative thin-film material cadmium-telluride or the more traditional amorphous-silicon. “You cannot be the best if you don’t develop a superior process yourself,” Meyer said.

Using its proprietary equipment has made it possible for Sulfurcell to move more quickly from CIS to CIGS, said Heiko von Dewitz, investment director at Intel Capital. “Plugging a new technology into an existing process allows you to accelerate the advanced technology in an efficient way,” von Dewitz said. “You don’t have to scrap your existing lines when you introduce new manufacturing technology.” In contrast, other CIGS companies have turned to using existing machines (often times from other industries) to manufacture materials, which they say reduces costs.

Sulfurcell uses glass to sandwich the CIS/CIGS layers. This design is more cost-effective than ones by CIGS companies that deposit the materials on flexible metal foil, Meyer said, because using the foil requires added steps of cutting CIGS sheets into strips before assembling them into panels. CIGS companies that use flexible metal substrates, such as Nanosolar, MiaSole and Global Solar Energy, will maintain their processes also reduce manufacturing costs and produce light-weight panels that can better blend in as part of buildings.

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Photo courtesy of Sulfurcell.