Amidst solar sell off, SK Group shows interest in HelioVolt

Solar thin-film startup HelioVolt might have stalled the commercialization of its solar panels, but it looks like it’s not out of the race quite yet. Korean conglomerate SK Group announced on Monday that it’s made an equity investment of $50 million in HelioVolt.

HelioVolt founder and chief strategy officer BJ Stanbery told us in an interview that the money will enable HelioVolt to improve its manufacturing technology and expand production beyond the small-scale 20 MW factory at its headquarters in Austin, Texas. The Korean company will evaluate the company’s progress and decide on further investments for building a factory to produce HelioVolt’s solar panels, said Stanbery, though he declined to provide a timeline for when decisions about the factory, including manufacturing costs, will be made.

Like many solar startups, HelioVolt has struggled to commercialize its technology, which uses copper, indium, gallium and selenium (CIGS) to convert sunlight into electricity. The use of CIGS became a popular pursuit when the price of silicon was fetching hundreds of dollars per kilogram in the mid-2000s. Silicon prices have plummeted since, reaching the $50 range in June of this year. At the same time, silicon solar panel makers worldwide have expanded their factories quickly to lower their manufacturing costs.

Solar manufacturers from SolarWorld of Germany to SunPower (s SPWRA) of the U.S. to Suntech Power of China (s STP) all have boosted their production. That trend, in turn, has also squeezed startups like HelioVolt, which bet that the use of alternatives to silicon could produce much cheaper solar panels. Solar panels that use alternatives to silicon are sometimes called thin films because of their use of a thinner layer of light-converting materials. CIGS thin-film solar panel maker Solyndra in California filed for bankruptcy earlier this month after borrowing about half a billion dollars from the federal government to build a factory.

Pressure is on

HelioVolt is one of the CIGS companies that have felt these intense pressures, and its survival was in doubt. The company had hoped to start mass production in 2009, and then decided to try that in 2010 instead.

But 2010 proved not to be ideal after all. The company raised $31.5 million in debt and options in 2010 and then secured another $8.5 million in debt and was able to improve its technology. HelioVolt also said at that time that it was getting certification for its solar panels so that it could distribute its solar panels widely. A few months after that announcement, a HelioVolt investor said the company was looking for a buyer.

Stanbery said HelioVolt is well aware of the intense pressures as it seeks to navigate a market in which smaller players – and some big ones – have had to turn to much larger companies for financial and other help.

As we pointed out in this post, many solar companies have been sold in part or whole over the past year. CIGS solar panel startup Stion lined up Taiwan Semiconductor Manufacturing Co. as an investor and just opened a factory in Mississippi. TSMC rose to prominence as a foundry for chip startups that couldn’t afford to build their own factories. PrimeStar, a startup making cadmium-telluride solar panels, convinced General Electric (s GE) to support its technology, and PrimeStar promises to build a 400 MW factory to make the solar panels.

“We do believe that the industry is going through a long anticipated consolidation, particularly in the thin film area,” Stanbery said. “The winners will be those who fill find the right partners, and we have found the best partner for HelioVolt.”

SK calls itself the third largest conglomerate in Korea that includes 75 subsidiaries and affiliate companies. One of its better known brands is SK Telecom, but SK also is deeply involved in energy and chemical industries, which could help HelioVolt procure materials and scale up manufacturing and sales.

Focus on Asia

Stanbery said the SK investment reflects that Asia has become the company’s market focus, though where HelioVolt will build its first commercial-size factory remains to be determined. But the plan isn’t to expand its existing, 20 MW factory in Austin, from where it’s doing research and development and making panels for early customers, said Iga Hallberg, VP of business development at HelioVolt.

The Korean government has provided solar incentives, but the country is a small market compared with those in Europe, the United States and Japan. China could be a big market because of the government’s announced plans to subsidize solar power projects.

While Stanbery declined to discuss the company’s manufacturing cost reduction plans, he said the company believes it can produce solar panels at lower costs than First Solar’s (s FSLR) once its annual production capacity reaches “around 300 MW.”  Of course, the timing of achieving that goal will be crucial, and the details of the plan are still being worked out.

The company is rolling out 75-watt, 2-foot by 4-foot panels, Hallberg said. That will give the panels an efficiency of about 10.3 percent.

A project is underway in Texas that uses HelioVolt’s solar panels. A 23 KW installation is taking shape at Texas A&M University, Hallberg said. The project should be completed around October, she said. She declined to discuss other customers. HelioVolt is targeting commercial rooftops. HelioVolt has raised over $200 million since its inception in 2001, the company said.

Images courtesy of HelioVolt