November 4, 2010

Silicon Valley/San Jose Business Journal

Calisolar partners with Suntech to expand its power reach

Calisolar Inc. CEO Sandra Beach Lin has been on the job for more than two months, but the goal is clear — lead the company from startup to full-fledged powerhouse in the production of solar silicon, wafer and cell manufacturing.
To get there, the company cut a deal with Suntech Power Holdings Co. Ltd., the world’s largest producer of crystalline silicon solar panels, and acquired Ontario, Canada-based silicon supplier 6N Silicon Inc.

Calisolar, which produces solar silicon and high-performance multicrystalline solar cells with facilities in Sunnyvale, Ontario and Germany, partnered with China-based Suntech in late October. Publicly traded Suntech, with about $625 million in revenue, plans to help Calisolar ramp production at its Vaughan, Ontario, facility and double the number of employees there to 350, as well as build another solar silicon manufacturing facility in Ontario. Terms of the deal were not disclosed, but Lin called Suntech a “valued partner” and said the new Ontario facility will be larger than the existing one.

"For Calisolar, it is a very significant partnership," said Ullas Naik, managing director with Globespan Capital Partners. Globespan, with offices in Palo Alto, Boston and Tokyo, counts Calisolar among its portfolio of cleantech companies.

The multi-year agreement allows Suntech to purchase the solar silicon made by Calisolar at the new manufacturing facility.

"Suntech would be a primary offtaker of the product that is produced at the plant," Naik said.

The partnership comes months after Calisolar acquired privately held 6N through a stock-for-stock transaction in February. 6N’s solar silicon plant is enabling Calisolar to sell a higher-grade, higher-performance solar cell.

"The breadth and depth of the technology we have purchased at 6N and the talent we have purchased is rapidly enhancing the business model," Lin said.

In addition, $22.5 million was raised from existing Calisolar and 6N investors. The funds are expected to go toward expanding its Vaughan operations and increasing the capacity of Calisolar’s Sunnyvale cell manufacturing facility. The Sunnyvale site is expected to grow from 60 megawatts worth of solar wafers and cells to 75 megawatts by the end of 2010.

Growing customer base
Without divulging Calisolar’s customers, Lin said they are large, leading global energy providers.

The new Ontario facility is expected to provide the company with the ability to service a global market.

Lin added that there has been interest in Asia and Europe to export its products. Lin said Calisolar’s differentiator is that it offers an alternative, less energy-intensive silicon process compared to that of the German engineering conglomerate Siemens AG.

"We know we can go toe-to-toe with them," she said of Siemens.

And that proposition equals investor confidence, Lin said. “For me and for our investors, they have seen a company that has gone from a few good ideas to technology that has really been proven out,” she said.

Naik said discussions with additional potential partners are underfoot.

"Suntech is interested in the silicon side, but other partners are interested in buying the cells," he said, without naming the large module makers. He added that Calisolar is one of few solar startups scaling rapidly enough to be approaching cash-flow positive, break even by the end of the year.