A Palo Alto company will announce today that it will spend about $100 million to build the world's largest solar cell factory and that it will locate its new plant in the Bay Area.

Martin Roscheisen, chief executive of Nanosolar Inc., said Tuesday that his firm is considering sites in San Jose and San Francisco that would be close to its current pilot plant in Palo Alto, where it uses an unconventional material as the basis for its solar cells. Assuming that it stays on track, by 2007, Nanosolar's new factory will produce 200 million solar cells a year that will generate more electricity than the output of a plant in Japan run by Sharp, considered today's world leader in solar power.

Solar cells absorb photons from sunlight and convert these into electrons to generate electricity. More than 90 percent of all solar cells use silicon to transform light into electricity.

Ed Beardsworth, an independent energy technology consultant in Palo Alto, said shortages of silicon -- the prime ingredient in solar cells and computer chips -- are opening the market for alternative materials.

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Nanosolar is one of several companies that use a blend of metals that includes copper and gallium. "The question is whether these new companies like Nanosolar can live up to their own expectations," Beardsworth said.

Joel Makower, a consultant with Clean Edge, a research firm that follows renewable energy, said firms such as Miasolé in San Jose and DayStar Technologies in New York state are also racing to mass-produce solar cells that use materials other than silicon.

"It's a wide-open field," he said.

Roscheisen said Nanosolar will make its new solar cells through a process much like printing. The base of the solar cell will be a metal foil bathed in a solution containing tiny particles of the light-capturing metals. The liquid will evaporate and leave behind this photovoltaic material. A thin, transparent film will be baked over the cell. Currently, the process prints onto a metal foil 4 inches wide, but Roscheisen said this could be extended up to 72 inches.

To build its new plant, Nanosolar raised $75 million from European and U.S. investors including Jeff Skoll, the former eBay executive who also backed "An Inconvenient Truth," former Vice President Al Gore's movie on global warming. Roscheisen said $15 million in government subsidies would be part of the factory financing package, but he declined to identify those subsidies. He said a final decision on the factory site would be made soon.

Dave Pearce, chief executive of Miasolé, said his firm uses a slightly different approach at a plant in Santa Clara that is supposed to expand from making pilot batches "to reasonably high-volume production" later this year.