Michael Grätzel is a man with a mission. As the inventor of a low-cost solar cell, he wants to help the world avoid an energy crisis by harnessing the power of the Sun. His translucent Grätzel cells use a combination of titanium dioxide and organic dyes to convert sunlight into electricity, providing a cheaper and more environmentally friendly source of energy than silicon solar cells.

Grätzel, who is director of the Laboratory of Photonics and Interfaces at École Polytechnique Fédérale de Lausanne in Switzerland, often accompanies an explanation of his work with a small chuckle, as if he can't quite believe his success. He was similarly modest when he received the 2010 Millennium Technology prize for his invention in June, along with an €800,000 fund that will allow him to accelerate his research. The prize, which recognises technological innovations that improve quality of life, is awarded by the Technology Academy Finland every other year. Inaugurated in 2004, it was first won by the inventor of the world wide web, Tim Berners-Lee.

How is the Grätzel cell different from other solar cells?

Silicon cells absorb sunlight and generate electric charges, but the silicon also has to transport the charges and separate positively charged carriers from negatively charged ones. To do the separation, you need a positively doped and negatively doped layer of silicon and for this to work well you need very pure materials – solar grade silicon has to be 99.9999% pure. Our cell is different in the sense that it is close to what photosynthesis does in green leaves. The charges are generated by dye molecules and other constituents take care of the conduction. That separation was achieved for the first time by our cells – except for photosynthesis, which has been working for 3.5 billion years!

Where did the idea come from?

It was curiosity-driven. We were the first to make pigment nanoparticles in the 80s and if you put these nanoparticles in water you can't see them; it's like a semiconductor solution but transparent. We knew that we needed to sensitise them to visible light like you do in photography. You start with silver bromide but it has very little light response, so you put a sensitiser on it. We made the particles sensitive to visible light and found you could inject electrons at high speed and that made us curious – maybe we could make a photovoltaic cell.

The cells come in a range of colours; how does that work?

The colour can be selected by choosing a dye, so you can have a red one, a blue one or a green one. You even could use near-infrared dye that lets visible light pass through, so it would look like a normal window.

So we could soon all be producing energy through our windows? How much will that cost?

The photovoltaic film is just added to the cost of the glass – what matters is the cost per kilowatt hour. There has been an evaluation by Fujikura, a company in Japan that is producing the cells and it has projected a price of 4 yen (3p) per kilowatt hour.

How does that compare with current solar panels?

It's much less: normal silicon is five to 10 times higher. You usually take the price per peak watt – how much does a device that makes one watt in full sunshine cost? This technology gives you 40 yen (30p), which is more than a factor of two lower than the closest competitor, solar cadmium telluride panels, and with the advantage that we are not using cadmium or tellurium, which is as rare as gold.

So there is an environmental advantage in the way you produce them?

Yes, because we're not using any energy-intensive, high-vacuum methods or toxic elements in their production.

Do you think these solar panels can form part of an energy revolution?

They will certainly make a contribution. The demand is so huge that by 2050 we will have a 14-terawatt power supply gap – that's as much as we are consuming today, so how are we going to cover that? Certainly not with oil – instead of having more oil, we'll have less. We've seen with the Gulf Coast accident that drilling is getting more dangerous and oil reserves are more difficult to obtain. Solar can maybe pick up one-fourth or one-third of that slack, and then there's wind and other renewable technologies – biomass, hydroelectric, CO² sequestration... lots of technology has to kick in.

People are resistant to use renewables because of the low return on investment. Can you help?

That's the problem, they are so expensive, except for countries that have a feed-in tariff [electricity suppliers pay their customers for feeding excess energy into the grid]. We need to get to a stage where solar panels are competitive, we have to come down to the range of 30p kilowatt hour, and this has the potential to deliver that price.

But is price enough for people to change?

We need to change public awareness. The consumer has to have a benefit, that's the only way to drive it. We've seen people respond favourably to this technology – they ask: "When can we buy it?" – and if that's a question, then we can sell. Of course, we have to be sure about the product – quality and stability, production on a large scale – and this will take some time. We're talking about 40 years from now, or even longer, but we have to start early.

Will winning the Millennium Technology prize help get your message out there?

It it will foster our research. Mass production has started, but it will amplify the situation and accelerate the commercial products.