But the $1 target would enable solar to compete without subsidies with new generation from any source, including coal boilers.
"At $1 per watt ... this will pay for itself," Chu told his science advisers last year. "Everything becomes possible."
Hitting that target will require breakthroughs on three separate fronts, DOE and industry experts agree. The cost of solar modules must be slashed from about 75 cents per watt to a third of that amount, or less. Similar reductions are required for the costs of the electronics that manage solar modules' output, and for installing solar units at homes, businesses and utilities.
Van Mierlo says 1366 aims to take the cost of a silicon photovoltaic solar module down to 25 cents per watt, exceeding this part of the $1 per watt goal.
A new process is born
ARPA-E's funding enabled 1366 to build a prototype factory machine to produce ultra-thin silicon wafers directly from molten silicon. Van Mierlo won't detail how it's done. The process is protected by several patents, "and some things we just keep secret," he said. He compares the task to pulling newly formed sheets of thin ice off a pond in winter.
Today, molten silicon is cast into ingots and wafers are cut from the ingots, but half of the ingot is wasted in the sawing operation.
The 1366 process, invented by MIT professor and company co-founder Emanuel Sachs, would compress four costly production steps into one and eliminate the need to saw wafers from the ingots. "We have demonstrated we can make wafers directly from the melt, which should allow us to get down to less than 25 cents per watt. With the traditional sawing technology, you just can't get there," van Mierlo said.
"Now you have a yield [from the purified silicon] that is well above 90 percent instead of losing more than half the silicon in the sawing operation," van Mierlo said. "There are big, big savings there."
The "Direct Wafer" prototype at 1366 looks a lot like a factory machine, van Mierlo said. "What's missing is the automation. We don't have the throughput yet. But the size of the machine, the way it's built, the interfaces, and all of that is factory-ready."
"There are substantial technology challenges ahead," said 1366 board member Bob Metcalfe. He's with Polaris Venture Partners, one of the firm's initial backers. "That's not a Nobel Prize, but it's a technological challenge. It will take time and money."
Hopes for a strong U.S.-based solar industry suffered a hard blow last month when Evergreen Solar Inc., a leading solar panel manufacturer, announced it would shut down its manufacturing facility outside Boston by the end of March, at a cost of 800 jobs. It will relocate to Wuhan in central China to take advantage of low labor costs and strong government backing for solar expansion.
Evergreen's unique wafer manufacturing technology was invented by Sachs. It opened in 2008 with some financial support from Massachusetts state programs. But with U.S. subsidies uncertain and prices falling, solar panel manufacturing in this country no longer appeared viable.
The $1-per-watt goal has doubters, as well.
"We're still far away from a $1-per-watt cost" for a solar module, said Shyam Mehta, a senior analyst at GTM Research. "I'll be very surprised to see that happening in the next five years, even 2017. Ultimately, that has to happen. We have to hit somewhere around those costs."
"Is that a slogan or a real target?" asks Ric O'Connell, renewable energy consultant at Black & Veatch Corp. "I think the answer is, it's somewhere in between. It's sort of like 20 percent renewable by 2020. It sounds great, '$1 a watt.' In some sense, it is good to have a target, so it's more than just a slogan. But it's early days. They just rolled at that program. There's a lot of work to be done."