The One Percent Solution: How Innovalight’s Silicon Ink Makes Solar Panels Slightly More Efficient, and Why That’s a Huge Deal

10/6/10Follow @wroush

Silicon Valley is a place defined by big numbers and rapid change. Since the 1960s, the number of transistors that can be placed on an integrated circuit for the same cost has doubled every two years or so. The capacity of Flash memory chips has been increasing even faster of late, doubling every year. So when a company comes along promising to make solar panels that are a measly one percent more efficient than today’s standard technology, you might be tempted to shrug.

Don’t. That’s actually a lot, and it’s exactly the kind of incremental improvement that could soon raise solar energy to what’s known as “grid parity”—the point at which it’s equal to the cost of grid electricity, which, in the U.S., comes mostly from plants burning inexpensive but climate-destroying coal.

Today’s photovoltaic panels, which are made of crystalline silicon and capitalize on the photoelectric effect first explained by Albert Einstein, convert about 18 percent of the energy in sunlight into electricity, on average. Panels treated with “silicon ink,” a liquid material developed by Sunnyvale, CA-based Innovalight, can hit 19 percent or more. If you’re a solar panel manufacturer like China’s Suntech Power, which produced a gigawatt’s worth of solar products last year, “going from 18 to 19 is a big deal, because it has an enormous impact on the output of your manufacturing infrastructure,” explains Conrad Burke, Innovalight’s CEO. “A gigawatt factory in China will have 40 individual 25-megawatt lines, each a football field in size. If you can find a way for them to add one step to their existing equipment and help to get a 25 megawatt factory line up to 30 megawatts, suddenly you have a 1.2 gigawatt factory for no more cost in capital, and that has a huge impact on the bottom line.”

Innovalight's silicon inkWhich could also help Innovalight’s own bottom line. And none too soon: the company’s investors, who’ve put about $60 million behind its silicon nanocrystal technology, have been waiting a long time for some good news.

Innovalight was founded in St. Paul, MN, back in 2002, and originally intended to go into the lighting industry—hence its name, which isn’t a reference to sunlight. “It turned out that didn’t work, and we were faced with the dilemma of whether we should shut this down or do something else with it,” Burke says.

Burke, a native of Ireland, was first introduced to Innovalight when he was a venture partner at Sevin Rosen Funds, one of the company’s original investors. Eventually, he decided he needed to take a more hands-on role himself.

“In essence, I restarted the company,” Burke says. “I took two of the original team, moved them here, hired a chief technology officer, raised a little more money, and sold the investors on the premise that there was an application here for solar.” That was five years ago. Now the company has 60 people, almost a quarter of whom have PhDs in material science and related fields.

At the core of Innovalight’s technology is a method for turning silicon into a gas, and then collecting the gaseous atoms into pure silicon nanocrystals, each 5 to 10 nanometers in size and completely free of oxygen. Silicon atoms love oxygen, and left to their own devices, they will form silicon dioxide, i.e. quartz or sand, which is useless for photovoltaic cells. Preventing that was “a major achievement we made in the company,” says Burke. “I can tell you, there were some very dark moments in the early stages where we sat around the room saying ‘It can’t be done, physics is against us.’ But after a lot of hard work and effort you start to figure out some really innovative ways to do it.”

Innovalight needed the particles of silicon to be pure so that they’d add to the efficiency of electron exchange inside photovoltaic wafers. It needed them to be tiny because the next step in the company’s process, once it’s produced the nanocrystal powder, is to mix it with a solvent. “You don’t want to have the particles falling out of solution, so having particles of that size allows you to turn them into an ink—a new species of silicon,” says Burke.

Using standard screen printing equipment already found on all solar cell fabrication lines, manufacturers can then put a thin layer of the ink on top of a silicon solar cell, directly beneath the areas where contact fingers will be attached. In effect, the silicon ink acts as a doping agent in these areas, decreasing the electric resistance of the bulk silicon and allowing the contact wires to extract more of the free electrons knocked loose by the sun’s photons.

Conrad Burke

Conrad Burke

There are other ways to eke efficiency improvements from photovoltaic cells, of course, but many of them require exotic materials or deposition methods, says Burke. “The problem facing most of these ideas is that they are not manufacturable,” he says. “You have to be able to process 1,600 wafers an hour at 99.5 percent yields, and that is a pretty extraordinary task. So the fewer steps you have to add, the better. In our case, it’s just one, and the material is completely benign.” (As another example of a company taking an innovative apprach to improving solar cell efficiency, I’d point to Boston-area startup 1366 Technologies. There, engineers simply make the contact fingers narrower, so they don’t block as much sunlight from hitting the wafer.)

But while Innovalight fared better with silicon ink than it had with lighting, the company has still had its share of recent twists and turns. For several years after the 2005 re-launch, Burke was pushing for the company to become a full-fledged solar panel manufacturer. Innovalight even built its own demonstration solar cell manufacturing line—a very costly investment. But by 2008 he had decided that manufacturing “was probably not the best route for us,” Burke says. “And that has turned out to be correct. All of this [solar manufacturing] has gone offshore. You have unprecedented scale in China, and the capital required to build those factories is just enormous. We figured, why not deploy our technology into that huge infrastructure—and that has turned out to be the smartest thing we’ve ever done.”

This year Innovalight announced the first two customers for its silicon ink, Yingli Solar (NYSE: YGE) in Baoding, China, and JA Solar (NASDAQ: JASO) in Shanghai. There are “many other” customers, but Innovalight isn’t contractually allowed to name them, Burke says. There’s so much business in China that in August, the company opened a sales office in the skyscraper-dotted Pudong district of Shanghai. “We are expanding our presence in China and need to be closer to our customers,” Boris Mathiszik, Innovalight’s vice president of worlwide sales, said at the time.

So was it a comedown for Innovalight to become, in effect, a supplier to China, which has quickly and quietly emerged as the world leader in solar manufacturing? To some extent, yes, Burke says. “When I brought that to our board and our investors in 2008, there was a little bit of anxiety or disappointment,” he says. “I think there was a somewhat romantic wish to be a solar panel manufacturing company ourselves. But very quickly, the investors and the board realized that the market was shifting fast—and then, of course, we had the economic crisis. So in fact, that was the right thing to do, and we did it very well, at exactly the right time.”

Even Burke’s earlier decision to invest in building a demonstration line had an unexpected payoff. The company now uses it to make solar cells for testing, to demonstrate that its silicon ink actually delivers the promised efficiency gains.

And the market still open to Innovalight isn’t exactly small. Photovoltaics is a $30 billion industry that’s been growing at 40 percent per year since 2003. When solar manufacturers see competitors like Yingli and JA Solar implementing low-cost improvements that make their solar cells 1 percent more efficient, they’ll be all but forced to invest in silicon ink themselves, Burke predicts. Which means Innovalight is on the path to profitability, he says, and likely won’t need another capital infusion. (The most recent fundraising round was in January 2010 and brought in $18 million. Leading that round were EDB Investments and Vertex Venture Holdings, both of Singapore; existing investors Apax Partners, Arch Venture Partners, Convexa Capital, Harris & Harris Group, Sevin Rosen Funds and Triton Ventures also joined.)

“We want our material on every silicon solar cell in the world, that is our goal,” Burke says. “But customers want to see yields and want to be convinced before they add a new step. That is a clear advantage we have, versus a lot of these other promising technologies. We have the capabilities right in this building to keep us ahead of the pack.”

Wade Roush is a contributing editor at Xconomy. Follow @wroush

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