State and federal governments bet hundreds of millions of dollars of taxpayer money on solar companies such as Solyndra LLC of California and Evergreen Solar of Marlborough only to see them go bust. Despite the failures, they’re doing it again, backing a local solar component maker with a $150 million loan guarantee.
The company, 1366 Technologies, said this time is different.
1366 opened a $6 million pilot plant in Bedford Wednesday, financed completely by private investors, and executives said they won’t tap taxpayer money until they prove the company’s technology and products can succeed in a fiercely competitive industry increasingly dominated by low-cost Chinese manufacturers.
“Once everything works optimally, we want to scale to a larger facility,” chief executive Frank van Mierlo said. “That’s when we’ll take the [federal] money. It protects the taxpayer.”
The one-story, 42,000-square-foot manufacturing and research complex with green-tinted windows is the first step in that growth plan. If successful, it could make the company a major player in a solar wafer sector that is expected to be worth $4 billion in the next few years, according to Lux Research Inc., a market analysis firm in Boston.
1366 Technologies’ main challenge, said Lux analyst Fatima Toor, will be remaining cost-competitive in a still emerging US industry that has been left reeling as low-cost foreign rivals drive down solar panel prices. Both Evergreen Solar and Solyndra succumbed to that competition.
1366 Technologies said its manufacturing process can make wafers for 10 cents to 12 cents per watt, compared to roughly 20 cents for standard wafer manufacturing processes.
“Of all the companies that are out there, 1366 has a chance of survival,” said Toor, who attended the company’s plant opening, but “there is a sense of caution, given all the history, given all the baggage that the solar industry is carrying right now.”
Not everyone is as optimistic.
“I don’t know that it’s ever going to be competitive with cheap solar cells that come from you know where: China,” said Theodore O’Neill, a technology analyst at Litchfield Hills Research in Connecticut. “I mean, they’re just never going to be able to compete with that, I’m sorry. It’s not going to end well.”
The Department of Energy did not return requests for comment.
Named for Earth’s solar constant — the rate at which energy reaches the planet’s surface from the sun — 1366 Technologies was founded in 2007 to commercialize technology initially developed at the Massachusetts Institute of Technology. 1366 executives say they have created a highly efficient process that takes about 20 seconds to make a silicon wafer — the base component of a solar panel — compared to days in more traditional processes.
The 1366 technology uses about half the silicon of traditional wafer-making while cutting plant, equipment, and labor costs by about one-third, according to Emanuel “Ely” Sachs, the company’s chief technical officer.
Most manufacturers need four steps to make a wafer, but 1366 Technologies does it in one by shaping the components individually from molten silicon and setting the thin sheets inside a furnace.
The pilot plant, which will ramp up production in the coming months, will test the process, which was on display earlier this week as Sachs and van Mierlo toured the plant with visitors. In the company’s machine lab, a worker used a lathe to make parts for one of the furnaces that 1366 Technologies uses to make wafers. In another part of the building, a team in white lab coats printed metal onto wafers, turning them into solar cells.
Sachs and van Mierlo said they are focused on proving that their company can provide silicon wafers cheaply enough to allow US solar panel makers to stay profitable despite prices that have dropped fourfold over the last few years.
“In my mind, the solar industry is competitive precisely because it’s a promising industry,” van Mierlo said. “We’re in the business of building a large company here.”
To succeed, van Mierlo said, he and Sachs will use the same strategy they’ve been employing for years: Be innovative, but frugal.
In that vein, 1366 Technologies built its Bedford plant, which will be capable of making roughly 6 million wafers a year, using money raised from investors like North Bridge Venture Partners, a Waltham venture capital firm. The plant is expected to employ 100; 1366 now has a staff of about 45.
Once the company has refined its manufacturing process, van Mierlo said, it will tap the first half of the $150 million loan it received in 2011 from the Department of Energy to build a larger plant — likely in 2015.
Carmichael Roberts of North Bridge Venture said 1366’s technology first sold him on investing in the company. But it has been Sach’s and van Mierlo’s measured approach to growing the business — particularly as other firms have floundered — that has kept him believing the company will be a success.
“When we build something,” Roberts said, “it’s going to work.”Erin Ailworth can be reached at email@example.com. Follow her on Twitter @ailworth.