* Nanosolar to supply EDF, Belectric and Plain Energy
* Deals could be worth up to 1 GW of panels
* Company will build next factory in California
By Nichola Groom
LOS ANGELES, April 28 (Reuters) - Solar startup Nanosolar Inc on Thursday announced supply agreements with three European developers, the latest step toward the thin film company’s goal of becoming competitive with traditional panels.
The company signed supply deals that combined could be worth up to a gigawatt of solar panels with French utility EDF Energies Nouvelles SA EEN.PA and German project developers Plain Energy and Belectric.
The agreements with EDF and Belectric run for six years, while the Plain Energy deal runs for three years, San Jose, California-based Nanosolar said. All three companies took stakes in Nanosolar in 2008.
Nanosolar, which began commercial production about a year ago, is one of a handful of Silicon Valley startups that makes thin-film panels from copper indium gallium selenide, or CIGS. CIGS technology holds the promise of having cheap production costs combined with cell efficiency near the best of traditional silicon-based solar cells.
But CIGS panels have been slower to achieve mass production because of the complicated manufacturing process needed to combine the four materials. In addition, CIGS technology has seen stiff competition from silicon-based panels, prices on which have plummeted in the last few years due to the rise of cheap Chinese products.
After a management shakeup that included hiring former Rambus Inc (RMBS.O) Chief Executive Geoff Tate to lead the company a little over a year ago, Nanosolar has set its sights on ramping up production, boosting the efficiency of its panels and lowering costs.
Nanosolar’s technology involves using a proprietary ink to print the materials onto rolls of aluminum.
The company aims to have a production capacity of 115 megawatts at its San Jose, California facility by the end of this year. That location will eventually be expanded to 250 MW, Tate said in an interview, and Nanosolar plans to build a roughly 500 MW factory -- also in San Jose -- in 2013 or 2014.
“Our cost structure is such that that doesn’t put us at a disadvantage.” Tate said. “We have a factory that’s quite automated, so labor costs are not a big factor in our production costs.”
The supply agreements with EDF, Belectric and Plain Energy are dependent on Nanosolar achieving its production and efficiency targets, Tate said.
Nanosolar is currently producing solar cells with an average efficiency of about 10 percent, Tate said. The company aims to increase that to 12 percent by early next year. Rival CIGS manufacturers are also predicting sharp and quick increases in efficiency.
“We believe we will keep pace with the best of them,” Tate said.
Earlier this week, rival CIGS startup Miasole said it shipped panels with an average efficiency of 10.5 percent in the first quarter of this year. [ID:nN25155276]
The most efficient silcon-based cells have a conversion efficiency of more than 20 percent, while thin film cost leader First Solar Inc (FSLR.O) most recently reported a conversion efficiency of 11.6 percent.
Nanosolar, which has raised about $500 million, has the funds it needs to reach the 115 MW of capacity, Tate said. It will need to raise more funds to expand its factory, however, and is at the beginning stages of talking to investors.
Nanosolar investors include Benchmark Capital, Mohr Davidow Ventures, Energy Capital Partners and AES Solar (AES.N). (Reporting by Nichola Groom, editing by Bernard Orr)