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Chinese solar panel giants are in a bind — they’re churning out too many rock-bottom, commodity solar panels, and losing millions every day. In fact, most solar panel makers are currently laser focused on trying to boost the efficiency of their panels so that they can sell them at higher prices and actually make some money. A Swedish startup called Sol Voltaics says it can help out.

Sol Voltaics, which is discussing its product and funding for the first time this week, said it has developed a low cost way to make tiny nanowires out of the semiconductor gallium arsenide. The company turns these nanowires into an ink, which can be layered onto basic solar panels and boost the efficiency of a standard panel by 25 percent.

The idea is that solar panel makers would want to buy this technology because they can sell the more efficient panels at a higher price, and raise their margins. In addition, the overall installed cost of the more efficient solar panels (they produce more power) could be lower by 15 percent to 20 percent.

Swedish solar innovation

Founded in 2008, Sol Voltaics won’t be producing its nanowire ink — called SolInk — at pilot scale until 2015, and commercial scale in 2016. But it’s already started to prove that its technology works, and has had its nanowire cells certified by research firm Fraunhofer for an efficiency of 13.8 percent. This year the company is focused on demoing how its ink boosts efficiency on a larger scale, and in 2014 they’ll work on perfecting the equipment that its customers will use to cover panels with the ink.

With just 20 employees, Sol Voltaics has been operating in a relatively lean mode for a solar manufacturing company. To date the startup has raised just $11 million in funding from private and public funders and family offices, including Industrifonden, Foundation Asset Management, Scatec, Nano Future Invest AS, Nordic Innovation and Vinnova. The company hopes to raise another $10 million to $20 million this year, and plans to cap all of its funding at $50 million by 2016.

Sol Voltaics has some well-known names in the solar and venture capital sectors. The company was founded by Lund University Professor Lars Samuelson, who is an expert on the type of semiconductor that Sol Voltaics uses to make its nanowires. The company is led by Dave Epstein, who is a serial entrepreneur and former partner with Crosslink Capital, and Magnus Ryde, who was the former CEO of TSMC America, is Sol Voltaics Chairman.

How does it work?

Sol Voltaic’s innovation is that it’s figured out how to make tiny wires using the normally expensive but highly efficient semiconductor gallium arsenide. Solar scientists have spent years using gallium arsenide in various ways to make ultra-efficient solar cells, but the only way the material can be cheap enough to actually be used on a commercial scale is if it’s used in very small amounts — hence the nanotech wire part. But, again, in previous years the production of nanowires has also been relatively expensive.

The breakthrough came when Samuelson figured out a way to make the gallium arsenide nanowires in a gas phase instead of in a solid phase. Sol Voltaics calls this their aerotaxy process. Under the right conditions, in an air reactor, the company can grow these nanowires in seconds and store them in a liquid, producing a sort of ink.

Sol Voltaics wants to take this ink and sell it to solar panel makers, alongside production equipment that they can use to layer the ink — inkjet style — onto their own solar panels. The nanowires in the ink act as guides for the light and concentrate it. The company says the capital expensive of the ink and machines add 1 to 2 cents per Watt for the panels.

Sol Voltaics is targeting Chinese and other global silicon solar makers that are struggling and producing many of their panels at a loss right now. Proving that the technology can help them out — and is worth the investment — will take quite a few key partners and demonstrations. The good thing, though, is that if one customer starts using it as a competitive advantage and it works, others will want to use it to keep up.

Some of these huge solar maker players will have to survive, and could adopt and invest in new technologies to do that. The ones that do survive, will see the continued solar panel market explode over the coming years. There was a record-breaking 3.3 gigawatts worth of solar panels — or 16 million individual solar panels — installed in the U.S. in 2012, making solar power the fastest-growing energy source domestically.