Calisolar ditches loan guarantee, lands in Mississippi

Solar silicon and cell maker Calisolar has ditched a $275 million federal loan guarantee to build a factory in Ohio, but the company is still moving ahead with a manufacturing plan. The company just secured a $75.25 million package from Mississippi to locate its factory there instead.

Mississippi lawmakers approved the incentive package during a special session on Friday. Calisolar issued a press release late on Friday to say that it plans to use the money to build a silicon plant in Columbus that can produce 16,000 tons annually. The project will cost about $600 million, the company said. The package includes a $59.5 million loan for equipment and construction, an $11.25 million grant for infrastructure and a $4.5 million grant for workforce training, said Laura Hipp, the press secretary of Mississippi Gov. Haley Barbour.

Calisolar’s chairman of the board, John Correnti, told Mississippi lawmakers on Friday that the company is setting up shop in the state because of the quality of the local workforce, the Associated Press reported. Correnti was the former CEO of a steel mill located in Columbus, Miss.

“The reason we’re coming here, and I’m going to be frank, is the Mississippi farm boys and the farm girls,” Correnti told the lawmakers. “I wouldn’t trade a Mississippi farm boy or farm girl for any Russian, Chinese, Japanese, Mexican, South American.”

Calisolar was actually planning to put the factory in Ohio and won a $275 million loan guarantee offer earlier this year from the U.S. Department of Energy to build the project. The company apparently told Ohio officials that it couldn’t start building the project by Sept. 30 this year in order to meet the loan guarantee requirement, reported the local newspaper Mansfield New Journal. But that didn’t explain why the company wouldn’t stay put and secure financing in other ways, as it had done with Mississippi. We emailed Calisolar and didn’t hear back from the company.

Calisolar’s business model

Calisolar was founded in 2006 to commercialize a technology to make purified silicon cells. Around that time, the prices for conventional, pure silicon were going up to a few hundred dollars per kilogram, because silicon producers couldn’t make enough to meet the demand from both the solar and chip manufacturers. Silicon is the key ingredient in processors that power consumer electronics such as laptops, cell phones and iPads.

Purified silicon uses cheaper but dirtier metallurgical-grade silicon material, and using it to make cells requires a different process. The purified silicon promises to cost less and work just as well as the conventional silicon, but there is some skepticism about whether that is true or not.

The silicon shortage has eased since Calisolar’s start. But the company says it remains competitive in the market because its technology is able to produce cheaper solar cells that rival those made with conventional silicon. Calisolar bought a silicon purifying company, 6N Silicon, in Canada in 2010. Calisolar now claims it can produce silicon at a cost (equipment and factory construction) that is about one-sixth of a traditional silicon plant.

The company opened its first solar cell factory in Silicon Valley in 2009 and began shipping products to customers in 2010Calisolar’s website says 60 MW of solar panels that contain its cells have been installed. Producing cells with its own silicon has been critical for Calisolar to demonstrate the quality of its silicon. It’s not clear if the company intends to continue to focus on making cells, however. With the new silicon factory, Calisolar indicated in its press release that it plans to sell the silicon to customers rather use it to make its own cells.

Photo courtesy of Calisolar