Zoo Station

If you've been following VC news closely, you've probably heard of a bunch of leading Silicon Valley VC's and investors making investments in nanotech solar ventures. Investors interested in this space include Vinod Khosla, John Doerr, Larry Page, Sergey Brin, Bob Epstein, Bill Joy etc. Over $100 million in venture funding have been raised by firms pushing the technology. So, what's going on? The Indic View points to an SFGate story which deals with the issue. The trick seems to be in developing more efficient light gathering plastics, which can then cut costs down to levels currently being charged by the utilities.

Solar energy ranges between $4 and $5 per watt. The report suggests market expansion will require $2 to $2.50. If the price breakthrough occurs, says Wooley, the report's assumed price structure represents a $6.6 billion annual market opportunity. The Energy Foundation report also says that solar energy could furnish much of the nation's electricity if available residential and commercial rooftops were fully utilized. According to the Energy Foundation, using available rooftop space could provide 710,000 megawatts across the United States, whose current electrical capacity is 950,000 megawatts.

High production costs are among the reasons solar energy hasn't become a major source of electricity. The black, glasslike photovoltaic cells that make up most solar panels are usually composed of crystalline silicon, which requires clean-room manufacturing facilities free of dust and airborne microbes. Silicon is also in short supply and increasingly expensive to produce, so high manufacturing costs are the main reason behind high wattage prices. As a result, the cost of panel installation typically equals four to five years of expensive energy before production costs are recovered and systems begin paying for themselves.

With nanotechnology, tiny solar cells can be printed onto flexible, very thin light-retaining materials, bypassing the cost of silicon production. "Silicon is very capital-intensive. You don't need a clean room for plastic power where capital costs are one-tenth of silicon," said Raj Atluru, managing director at the venture capitalist firm of Draper Fisher Jurvetson in Menlo Park, a major investor in Konarka. In addition to being able to manufacture photovoltaic cells more quickly through printing, the companies also say that manipulating materials 100,000 times smaller than the width of a human hair will provide more light- collecting capabilities. Each printed nanostructure solar cell would act as an autonomous solar collector, and sheets of these products would have more surface area to gather light than conventional photovoltaic cells. The companies also say that the printed rolls of solar cells would be lighter, more resilient and flexible than silicon photovoltaics.

It remains unclear, however, who would install nanotechnology-based solar components if they become commercially available. "There's no channel to the market," said Nordan, who sees a fragmented solar installation market made up of numerous contractors, which makes adoption of any technology difficult. Nordan also sees obstacles in transmitting solar energy from rooftop collection sites back to electrical grids and other buildings not wired with photovoltaics.

"The problem is distribution. Nanomaterials could provide a way to transmit energy as well as capture it." Until the distribution issue is solved, Nordan says, solar energy will not be able to meet its potential of supplying vast amounts of power. Analysts like Nordan and Mints say that while rooftops are the most attractive areas for investors, nanomaterial solar energy may first be implemented on mobile devices like cell phones and laptop computers.

Interestingly enough, a lot of the players in nanotech solar are of Indian origin. This makes a lot of sense for a country like India with sunlight pretty much all year round, if only the unit cost of solar power could be brought down. To me, that sounds like a part R&D and part scale problem, neither of which are particularly insurmountable. As the energy demands in India skyrocket, it will be interesting to see if more investments are made in the alternative energy space, especially in solar.