Some $75 m of the funding came from the company's existing venture capital backers as well as a clutch of new investors, including several investment firms and private backers such as Christian Reitburger, who helped to fund silicon-based solar-cell manufacturer Q-Cells, and Beck, a leading systems integrator for photovoltaic power plants. Together with government factory subsidies, the company now has $100 m in cash.

"This will allow us to further expand our leadership position in solar-power innovation," commented Martin Roscheisen, Nanosolar CEO. "We are pleased to have achieved such a broad consensus among the world's leading investors in this industry that we have developed the world's distinctly most cost-efficient, mass-manufacturable solar cell."

Nanosolar's technology exploits thin films of copper indium gallium diselenide (CIGS), a direct bandgap semiconductor that generates a much larger photoelectric effect than silicon per unit of material. As a result, a thin film of CIGS just 1 µm thick can generate as much electricity as a 200-300 µm thick crystalline silicon wafer. Thin-film CIGS solar cells therefore offer similar conversion efficiencies to those based on silicon, at around 20%, but can be manufactured much more cheaply. Indeed, the company claims that a silicon solar-cell factory of the same capacity would cost more than one billion dollars to build.

Nanosolar isn't alone in developing a lower cost alternative to silicon solar cells, which currently account for 90% of the global photovoltaic market. Fellow US start-up Miasolé is also producing CIGS solar cells, while other companies - notably Solarion and Würth Solar of Germany - are exploiting copper-indium selenide (CIS), a related material that also offers good conversion efficiencies. Still others are focusing on dye-sensitized solar cells, which exploit photoexcitation of organic dye molecules to generate a current in a semiconductor layer made of titanium oxide nanoparticles.

Against this competition, Nanosolar is the first to achieve an end-to-end manufacturing process that can be scaled to high production volumes. Most importantly, the company has exploited molecular self-assembly to produce an "ink" of CIGS nanoparticles, which can then be printed onto a flexible substrate.

According to Nanosolar, this printing process is more efficient and repeatable than alternative vacuum-coating techniques - which struggle to deposit the CIGS compound with the correct atomic structure to achieve good efficiency - and enable the use of substrates that are up to ten times cheaper that the stainless steel substrates needed for vacuum deposition. Nanosolar's flexible substrate technology also allows solar-cell modules to be assembled with high throughput and high yield.

Nanosolar is currently choosing between three locations in San Jose, Santa Clara and San Francisco, but says that the facility will be built by the end of 2006. Once production starts, the company will be able to tap into a market that was worth $11.2 bn in 2005, an increase of 55% on the previous year. According to market research firm Clean Edge, the global photovoltaic market will reach $51 bn by 2015.

One key question is how quickly Nanosolar can ramp up to full capacity. "It's one thing to announce your output target, and it's another to bring it online," commented Clean Edge's Ron Pernick. "But if Nanosolar can deliver on that, they are going to be one of the first to deliver a mass-produced thin film at competitive prices."

• EverQ, a joint venture between three major players in the solar power industry, has opened its first production facility in Thalheim, Germany. The €70.5 m plant has a full production capacity of 30 MW, and was supported by a €27.5 m grant from the German government. The partners in EverQ are Evergreen Solar of the US, Q-Cells of Germany, and Renewable Energy Corporation of Norway.