U.S. solar startup aims to match First Solar's cost

SAN FRANCISCO Feb 10 (Reuters) - Solar thin-film start-up MiaSole is aiming to be a viable competitor to industry leader First Solar (FSLR.O) by lowering manufacturing costs of its panels as it ramps up production and opens a new U.S. plant.

MiaSole's current manufacturing costs are over $1 per watt, said Chief Executive Joseph Laia Jr.

First Solar, one of the world's largest solar module makers, has the lowest production costs in the industry for its thin film cadmium telluride panels. The company broke $1 per watt in 2008 and reached 85 cents per watt in 2009.

While Laia declined to reveal MiaSole's exact manufacturing cost per watt, he said getting the cost down would be a major focus of the company this year.

"Can we get close to those guys (First Solar)? Yes," Laia told Reuters this week. "By the end of the year, we will be pretty close to them in costs."

Kleiner Perkins-backed MiaSole, which has raised about $300 million in venture money so far, makes thin film solar panels utilizing the copper indium gallium diselenide (CIGS) technology.

Sales of solar CIGS systems are tiny compared to polysilicon-based panels, made by large competitors such as Suntech Power Holdings (STP.N) and SunPower Corp SPWRA.O.

Costs to build CIGS cells are expected to fall to 50 cents per watt in the coming years, less than half the level of current silicon cells.

Industry research firm iSuppli expects the market for solar panels that use thin-film technology instead of the traditional silicon-based materials to more than double by 2013.

Currently, thin-film makers hold around 20 percent share of the solar market.

MiaSole, which was recently awarded a $100-plus million tax credit and has over 300 workers, is expanding the capacity of its California manufacturing capacity to 140 megawatts from about 60 watts over the next year, Laia said.

The Santa Clara-based start-up began shipping its thin film solar panels to customers in five countries since last October, and has started recording revenues, Laia said.

The company's panels convert about 10.5 percent of the sunlight that hits them into electricity, according to the company.

When asked about a potential public offering, which the former CEO of the company had said was on the cards, Laia said the company will not make a public debut until it makes money.

"We are not going to go out with a negative gross margin," he said.

MiaSole started with much promise in 2001 but ran into rough waters about two years ago, when many questioned whether it would even survive.

Laia replaced founder David Pierce as CEO in 2007, a time when the company also laid off some of its employees.

The company spent the last few years working quietly on engineering and research, and is now focused on manufacturing, he said.

Laia said while MiaSole makes solar panels with cells encased in glass, the company also sees opportunities in incorporating its thin films into building materials, such as roof shingles, because of its flexibility.

(Reporting by Poornima Gupta; editing by Gunna Dickson)