DOE response sheds light on hold up with loan guarantee for 1366 Technologies

A spokesperson for the Department of Energy contacted The Batavian today to explain that the reason 1366 Technologies hasn't received its loan guarantee yet is that the company has yet to meet all the criteria of the original 2011 loan guarantee agreement.

On one hand, that appears to be true. The DOE says 1366 needs to secure $100 million in private investment. That hasn't happened yet. The second qualification, that 1366 has yet to select a site for its factory, is a matter of how the DOE interprets 1366's agreement with New York to build at the STAMP site in Alabama.

Asked about the seeming incongruity of 1366 announcing a site selection in 2015 and the DOE now claiming no site has been selected, the spokesperson said, "In a meeting with DOE officials last month, 1366 Technologies stated that it was considering three possible locations for their facility, of which one location is in New York."

Laureen Sanderson, speaking for 1366 Technologies, said 1366 is committed to building in Genesee County but the company also let the DOE know that if the loan guarantee wasn't approved, the company would have to initiate its contingency plans, which likely means building a plant in another country.

"Of course, we discussed contingency plans with DOE," Sanderson said. "That's par for the course when talking with a partner, but our focus remains on New York."

She added, "What’s important to recognize is that our commitment to New York remains. That's the site we selected in 2015. State and local officials have been wonderful. We’re doing everything we can to make that site a reality."

What both sides can agree on is that negotiations on the loan guarantee agreement are ongoing and active. Sanderson characterized the discussions as positive and productive.

"We have a shared goal with the Department of Energy to create U.S. manufacturing jobs," Sanderson said. "That's what we both want to do and that’s what we hope we can achieve together with the Department of Energy."

The spokeswoman confirmed there was a loan guarantee finalized in 2011 but said it was contingent on 1366 securing $100 million in equity financing and finalizing a location for its manufacturing plant.

Sanderson confirmed 1366 has so far raised only $89 million but emphasized again the company is committed to New York and creating U.S. manufacturing jobs.

The negotiations with the DOE are necessary, in part, because the solar industry has continued to evolve since 2011.

"A lot has changed in the solar industry but what hasn’t changed is the strength of the technology," Sanderson said.

The lag time between announcing the company's plans to build at the STAMP site and now, Sanderson said, has enabled the company to improve the energy efficiency of its solar wafers, working with partner Hanwha.

"The technology has only gotten better," Sanderson said. "Our technology not only improves the manufacturing process and reduces costs but every wafer we produce is a better product."

The proprietary technique development by 1366 at MIT's labs in the Boston area uses molten silicon to make a wafer, rather than the cutting and grinding process the solar industry has used for 40 years. This reduces waste and energy used to make wafers.

Right now, 1366 only has a demonstration production facility in Medford, but the company, working with Hanwha, has continued to improve efficiency by .08 percent annually, making 1366's wafers the most efficient in the industry, Sanderson said.

When the company can go into full production, it can continue to make efficiency gains as well as work with solar panel companies to find other uses for this new technology. The company will be able to make thinner wafers that are strong and more flexible. Current wafers are too brittle for thin, flexible uses.

"Because we are able to work at the melt level, we are able to introduce new features the industry has long wanted but can't achieve," Sanderson said. "There is only more innovation and discoveries to be had through the manufacturing process."

When 1366 announced its intention to build in Alabama, CEO Frank van Mierlo cited lower cost, clean hydropower from Niagara Falls as an attraction to the location. Sanderson added another reason 1366 wants to stay in the United States, if at all possible -- a superior silicon supply chain.

"Our technology is the first major change in the solar industry in more than 40 years," Sanderson said. "We solved a manufacturing challenge that the industry has wanted to solve for 40 years. There is a lot of technological strength in the U.S. supply chain and with that strength, the U.S. has a real chance to establish manufacturing leadership."