1366 Technologies

The advanced manufacturing plant that could have been in Genesee County with a little more political support will open soon in Cyberjaya, Malaysia.

Bedford, Mass.-based 1366 Technologies has been building a plant with the support of one of the companies that have invested in the startup, Hanwha Q CELLS, and announced this week the plant will open soon.

Until this week, 1366 had been unwilling to release the location of its new factory.

It will be the world's first direct wafer factory. The direct wafer process was invented at MIT and patented by 1366. It makes solar wafers much like glass is made, with silicon being poured on a flat surface. The company has claimed the process is more energy efficient and produces less waste.

In 2015, Gov. Andrew Cuomo came to Batavia to announce 1366 as the first tech company to agree to open a plant in STAMP, the advanced manufacturing project in Alabama, that would bring 1,000 mostly high-paying jobs to Genesee County.

The plan was for 1366 to invest $700 million in the plant. GCEDC and Empire State Development and other state agencies would provide $53 million in tax abatements and grants, based on certain incentives being met over 10 years.

The Department of Energy, in 2009, also promised 1366 a $150 million loan guarantee based on 1366 meeting two criteria: selecting a site for their factory and raising $100 million in private investment.

That deal fell apart on claims by Department of Energy officials that 1366 failed to select a site for its factory and had failed to raise the $100 million.  

The company had raised $80 million in private equity but the DOE would not renegotiate the terms of the loan.

Rep. Chris Collins, based on a conversation with a member of his staff, was not hugely supportive of his staff and it's not clear he did much to help the process along. After 1366 announced plans to pull out of the STAMP deal, Collins questioned the company's credibility. He said at the time that 1366's announcement was evidence that the company was never serious about building a plant in Genesee County.

Based on the expectation that 1366 was coming to STAMP, with the help of Sen. Michael Ranzenhofer, the state released $33 million for development of shovel-ready infrastructure at the Alabama location. 

Since 1366 pulled out of the deal nearly a year ago, GCEDC Steve Hyde has said on multiple occasions that GCEDC is talking with several prospective tenants for STAMP but so far no new deals have been announced. 

As of May 1366 and the DOE were locked in a dispute over ownership of patents because of the assistance the DOE had given to 1366 early in the process of developing its technology. The Batavian is not aware of any change in the status of that dispute.

UPDATE 4:16 p.m.: In this story, and previously, we reported that 1366 withdrew from plans to build in STAMP in March. Shortly after this story published we received documents, in response to a Freedom of Information Act request, from the Department of Energy, that revealed that STAMP informed DOE of its request to withdraw its loan application on Jan. 31, 2018.  There was no other new information in the set of documents.

For all of The Batavian's previous coverage of 1366, click here.

Top photo: Frank van Mierlo, CEO, 1366 Technologies, and Gov. Andrew Cuomo at the October 2015 announcement at GCC of 1366's plans to build a plant at STAMP.

Photo released by 1366 of its nearly completed plant in Cyberjaya, Malaysia.

While it still may be a long shot for 1366 Technologies to build its solar wafer manufacturing plant in Genesee County any time soon, there is apparently an ongoing conflict between the company and the Department of Energy. Some industry observers seem to think it could hinder the company's plans to build its first factory in Southeast Asia.

E&E News reported earlier this month that unnamed DOE sources say the agency is pushing patent claims. (See, also, PV Magazine.)

DOE officials believe the United States has a possible claim on 1366 technology tied to grants DOE had given the company over the past eight years. In a review of the 1366 product exclusion petition under the solar tariff, DOE said "it came to light" that the company also had patents not reported as part of its DOE funding process.

DOE and 1366 would not provide documents describing in detail the conditions attached to DOE's grants.

"The department takes seriously its responsibility to protect its intellectual property rights and the parties' obligations under funding agreements," said department press secretary Shaylyn Hynes.

Laureen Sanderson, spokesperson for 1366, wouldn't comment on the dispute except to say, "We are working with the DOE to resolve any misunderstanding."

In 2009, when the DOE was part of the Obama Administration, the department made a $150 million loan guarantee to 1366. That was apparently contingent on the company securing a U.S. site for manufacturing and raising $100 million in private financing. The company selected a site in Alabama's Science and Technology Advanced Manufacturing Park -- AKA the STAMP project -- (though a DOE spokesperson later denied 1366 had made such a selection) but fell about $10 million short as of the fall of 2017 in its private investment goal.

To what degree that was the real sticking point in negotiations is hard to say based on available information, but at the beginning of the year 1366 announced it was withdrawing its application for the loan guarantee and planning a factory in Southeast Asia.

The ongoing conflict with the DOE came to light when 1366 applied for an exemption for its component in a planned tariff on solar panels manufactured in China.

A DOE spokesperson contacted by The Batavian last week did not respond to a request for comment.

If 1366 were to shift focus again and seek to return to STAMP the company would, of course, be welcome, said Steve Hyde, CEO of Genesee County Economic Development Center. He said GCEDC has not been contacted by the company, however. If it did come to that, just because of the passage of time, there would need to be new negotiations.

"But I’m sure that things could be put in place that are very similar," Hyde said.

It's unclear, and 1366 isn't saying, how far along the company is with its Southeast Asia plant.

After an apparent inability to reach an agreement with 1366 Technologies that would have paved a path for the company build its solar wafer plant in the STAMP project in Alabama, an attorney for the Department of Energy is threatening legal action against the startup for planning its factory in Southeast Asia.

John T. Lucus, acting general counsel for the DOE, submitted a letter to trade representatives last week in opposition to a request by 1366 for an exemption from a proposed tariff on solar panels manufactured overseas.

Citing a claim by 1366 in its application for the exemption that it is building a factory in Southeast Asia, Lucus wrote, "1366, however, made U.S. manufacturing commitments to DOE as part of millions of dollars in funding agreements with 1366. Constructing and operating the Southeast Asia facility is likely contrary to 1366's U.S. manufacturing commitments to DOE. DOE takes this matter very seriously and is currently looking into 1366's compliance with its DOE funding agreements."

A spokeswoman for 1366 declined to comment.

"We are not providing comment on the letter at this time as we’re working to consult with the DOE to gain additional clarity," said Laureen Sanderson.

The letter from Lucas makes it sound like the DOE either released funding or followed through on commitments to help fund the $700 million plant 1366 had hoped to build in Genesee County.

In fact, 1366 withdrew its application for funding late last year and announced its plans to build a plant overseas instead of in the U.S. after the DOE failed to finalize a 2011 agreement for a $150 million loan guarantee.

After 1366 selected Genesee County for its facility, the company sought to renegotiate part of the agreement. The negotiations were put on hold following Donald Trump's election and did not resume until well after Secretary Rick Perry was confirmed. According to sources, the DOE was unwilling to make any changes to the agreement, specifically as it related to a requirement that 1366 raise $100 million in private investment. At that point, the company had raised $80 million.

The other part of the agreement used by the DOE to justify withholding the loan guarantee was that the company had not selected a location in the United States for its manufacturing facility even though 1366 had signed documents with both the Genesee County Economic Development Center and Empire State Development naming STAMP as its future manufacturing home.

The 1366 manufacturing process is patented and touted as potentially disruptive to the energy industry because it eliminates waste, lowers costs, and boosts power efficiency. It was developed at MIT.

The factory in Alabama was expected to employ as many as 1,000 people at full capacity making just solar wafers, not solar panels, and the company said all of the initial customers would be overseas and not in the United States.

The letter from Sanderson to the U.S. Trade Representative regarding the Trump administration's proposed tariff on solar panels says the company is seeking an exclusion on the portion of any panels imported into the U.S. using direct-to-wafer technology. The wafer comprises 70 percent of a panel's expense, Sanderson said.

The exclusion application also states that 1366 still plans to build a factory in the United States at some point that will employ 700 to 1,000 people.

The company said the exemption would give the U.S. solar industry "breathing room" in order to compete in the global market.

In the request summary, 1366 states:

There's more to 1366 Technologies slipping away from the STAMP project than just losing the first company to commit to the technology park in Alabama -- it's also a loss of the kind of innovative company that would be good for the region, said Genesee County Economic Development Center CEO Steve Hyde during a meeting today with local reporters.

"These guys really do have a very innovative product," Hyde said. "They're changing an industry that's a high-growth industry. Usually, when you have credible quality IP (intellectual property) married to an industry of high growth, the sky's the limit. That was something that I really loved because we would be really introducing that kind of innovation here in our community, which has always been part of what I've been trying to cultivate in our community."

As reported earlier, 1366, which makes silicon wafers for solar power, announced today that they would not build their first full-scale production facility in Genesee County after the company and the Department of Energy were unable to agree on terms for a loan guarantee.

Already with more than $80 million in the bank from private investors and tax abatements guaranteed by GCEDC and Empire State Development, 1366 was trying to finalize a $150 million loan guarantee to help get its plant, with 1,000 local jobs, up and running. The original DOE guarantee was granted in 2011 but 1366 still needed to raise $100 million in private equity both to unlock the funds and to finance the first phase of the plant construction. (The public support for the project totaled $56.3 million in tax abatements and state grants over 10 years. Since 1366 never finalized financing and closed on the transaction with GCEDC, the company received no taxpayer money.)

Laureen Sanderson, a spokesperson for 1366, said the DOE agreed last year to reopen discussions on the loan guarantee but when it came time to renegotiate the agreement, it was clear there would be no guarantee the funds would be available at the end of what she said would be an expensive and lengthy negotiation process.

Earlier today, Rep. Chris Collins issued a statement blaming the breakdown in the funding process on 1366, saying it was evidence that the company was never serious about building its plant in the United States.

"Despite being approved over six-and-a-half- years ago and my office facilitating multiple contacts between 1366 and the Department of Energy, the company failed to complete the necessary requirements of their contract and has had to terminate its federal loan offer," Collins said in a statement.

According to 1366, it was their decision to withdraw its application, not the DOE terminating the agreement.

A statement from the Department of Energy supports that position.

1366 Technologies has withdrawn from its Loan Guarantee Agreement that was signed with the Department of Energy (DOE) in September 2011. 1366 Technologies has shown the potential to introduce an innovative American manufacturing technology, which is why the Loan Programs Office issued the loan guarantee to support commercialization efforts, following up on previous DOE support for the company’s research and development.

According to sources in support of the congressman's statement, the DOE twice "renegotiated" its agreement with 1366. A source at DOE would only say that the DOE extended the date of its loan guarantee in response to discussions with 1366.

Sanderson chafed at the accusation by Collins that the company wasn't serious about building its first facility in New York.

She said the company completed environmental assessments, preliminary designs, permits, and worked diligently to line up economic support and financing for a local plant. That was a lot of time and expense to invest in the project, she said.

"The fact that our seriousness is being questioned is troubling," Sanderson said. "I don't know how many other ways to make it clear that our commitment was there."

In a story earlier today, The Batavian shared a report about a budget proposal from the Trump Administration that would slash funding for the very program 1366 would need for its loan guarantee.

Collins responded to that report with the following statement:

Anyone that will blame President Trump and his budget for 1366 pulling out of their contract with DOE is misinformed and completely unaware of how these types of arrangements actually work. To start, the funding for this project was approved six and a half years ago, so the President’s proposed FY19 budget would have no impact, not to mention that Congress, not the President, authorizes and funds these types of programs. After renegotiations that consumed DOE resources, 1366 was still unable meet the requirements agreed upon in their contract. To me, it seems like 1366 was spending the last six and a half years playing the field to see if they could get a better deal elsewhere.

Asked today if he was ever worried whether 1366 was seriously committed to STAMP, Hyde said there was never a hint that 1366 wasn't fully invested in opening its first plant in New York. He also knew, however, there was no guarantee until 1366 finalized its financing.

"I also realized and appreciated that there was still a startup company," Hyde said. "The challenge that a startup company has is the capitalization of their project. It is a major challenge that well-established companies with good balance sheets don't have to be concerned about. So, I'm a realist and I knew that that was always a risk and that's really what ended up happening here. The markets moved and the project changed."

The Batavian first spoke with Hyde about delays that could endanger the project in the fall of 2015, shortly after an expected groundbreaking at STAMP didn't take place.

Hyde said the delays had nothing to do with support from Empire State Development or the governor's office.

"The governor has been nothing but incredibly supportive," Hyde said. "I mean he I think he really believes that we can we can re-engineer the economy of upstate with high tech."

The big issue, from Hyde's perspective, is that the solar industry is growing and changing fast. That turbulence makes it hard for any startup to attract private investment.

It might seem there's a contradiction at play here.  In the fall of 2015, groundbreaking on STAMP was delayed. Now, construction is underway, but not much regarding financing for 1366 changed between now and then.

"I have to beg to differ because there were things going on on the market side of the deal," Hyde said. "There were changing timelines for the project, the 1366 project, and what that does is it makes you decide to walk or jog while you do certain things relative to infrastructure versus run to support the project because then you optimize your cost profile as you do it."

Those changing market conditions played a role both in the fact 1366 didn't meet the requirement of the original DOE agreement to raise $100 million in equity and its requests for extensions of the agreement.

In November, besides the $100 million in private equity, the only other requirement a DOE source said 1366 was failing to meet was its obligation to select a site in the United States for its production facility.

The truth, was, however, that 1366 already had selected a location: STAMP in Alabama, in Genesee County, in New York, in the United States.

Hyde said the DOE's claim didn't make much sense.

"There was a signed state incentive proposal that talks specifically about where they were locating," Hyde said. "Then there was a signed local financial assistance application. This wasn't just a handshake deal. Governor Cuomo won't come and do a big announcement event like that if there isn't some serious negotiations and a documented commitment. Those documents have the signature of the CEO of 1366."

Sen. Charles Schumer has been supportive of both STAMP and 1366. The Batavian reached out to his office today to see if his staff might be able to offer insight into what went wrong with the project.

Spokesman Jason Kaplan issued the following statement:

It’s disappointing to learn that 1366 is withdrawing from pursuing this loan. Senator Schumer personally called DOE Secretary Rick Perry on Oct. 5, 2017 in support of 1366 and to request Secretary Perry meet with 1366 Technologies CEO to work with 1366 on a path forward. As a result of Senator Schumer’s intervention, Secretary Perry personally met with 1366 Technologies the following week on Oct. 11th. 1366 characterized the meeting as constructive and pivotal in finally allowing 1366 to open dialog with DOE and to map out a series of benchmarks the parties would work toward to move forward. We were hopeful they would move forward.

Jason Conwall, on behalf of Empire State Development, issued the following statement:

New York's commitment to 1366 Technologies was contingent upon their securing additional financing and since they have withdrawn from their DOE loan agreement, we won’t be able to move forward with the project at this time.

Today, Hyde said the loss of 1366 -- at least temporarily -- is not a setback for the project. In fact, just the fact that 1366 came along has helped move STAMP into a position to help it better appeal to site selectors for large high-tech companies looking for manufacturing locations.

"They did catalyze our ability to start the infrastructure development efforts at the site, which now makes the site far more competitive and attractive for another project to the scale of that one," Hyde said. "Now there's roadways in there. There's water lines and fire hydrants OK. New York State is committed to this. Howard Zemsky said we're going to keep going."

The withdrawal of 1366 also opens up a very attractive 100-acre parcel in the park.

"It's also protected by beautiful woods and wetlands," Hyde said. "You have a road in, it's blocked by woods, so when you pull in and then it's like, 'whoa.' It's a hundred acres that is just flat. That is something that many high tech companies find very attractive. There is a little bit of privacy, an environment where you can build a creative-class campus with walking trails, picnic areas, nature, respectful of the world conditions that we have. You got access to hydropower, sustainability. All of those things play very well into what high tech companies look for today."

There are at least four companies actively engaged in considering STAMP. There are have been two companies inquire about it that could take the entire park in one swoop.  There's a company that could bring in 3,500 jobs within three years.

In planning for 1366, STAMP is positioned well to attract what Hyde called, metaphorically, the small house. The house that needs a smaller foundation.  Those are not the companies currently most interested in STAMP.

"We now have the infrastructure to support a project of that (1366 Technologies) size and scale," Hyde said. "What we're seeing now, right now, today, with the four or so projects that are in our pipeline is projects that are much bigger than that. They need infrastructure much bigger than that. In other words, we need the funding to fund the blueprint for the big house. So the big water, the big sewer, the big electric, and that is the ongoing conversation that we're having with the state right now. This is not the time that we can pick up our toys and go home. This is time to double down and go harder because we're seeing deals that validated this site, and 1366 certainly validated it."

Hyde said ongoing negotiations with site selectors also validates the value of STAMP.

"We've got a project right now that has kicked the tires of this site and had five site visits," Hyde said. "They've had their engineering teams, their business teams, their marketing teams, their workforce teams in our place for like 14 days due diligence. Those companies wouldn't be spending that kind of time if this wasn't real.

Nothing is written in stone, though. STAMP is just one location among many these big companies can choose. Now that the infrastructure is in, it will be easier for GCEDC and ESD to move quickly but markets move fast -- as 1366 seems to prove -- so there's a lot that can go wrong on the road to new high-tech jobs. 

"If this happened in Silicon Valley, it might not even hit your radar screen to make the news because high-tech projects come and go and morph and change," Hyde said. "In our world, it is a little different.

"This is new for us, so we need to continue to remember that we've got to put our battle gear on every day and continue swinging at this stuff because we have higher ed and the educational system assets. We have great infrastructure. You need to spend some more money to put that stuff together like we're doing with STAMP. But, you know what? We have real potential."

Solar wafer manufacturer 1366 Technologies has decided to build it's first full-scale factory in a foreign country rather than in Genesee County.

The innovative Masschuchett's-based company made its decision based on delays and uncertainty around a loan guarantee from the U.S. Department of Energy.  

"We have always wanted to have and intended to have factories around the world that were close to our distribution centers," said Laureen Sanderson, spokesperson for 1366. "We have decided to build the first one aboard. That doesn't mean the second can't be here in the U.S. and as those pieces come into place, the GCEDC will be the first call we make."

In a statement, GCEDC CEO Steve Hyde said that while this is disappointing news, it's important to note that 1366 had not yet received any taxpayer dollars for is proposed facility and that work continues to prepare the STAMP site for eventual tenants.

“We remain extremely excited and committed to STAMP because there is a long pipeline of leads and great interest in the site by various advanced manufacturing businesses," Hyde said.

While 1366 had raised nearly $100 million in private equity, and has continued to raise investment funds, Sanderson said, and had committed to the STAMP site, after the change of administrations in January 2017, the Department of Energy never released funds for a loan guarantee promised during the prior administration. The DOE's position was that 1366 had not met its obligation to select a site and raise $100 million equity.

Because of the rapidly changing business climate in solar power, 1366 then wanted to renegotiate the loan agreement but no agreement was reached.

In its own budget proposal, the DOE slashed $330 million funding for the program, called Advanced Research Projects Agency-Energy, even though it is supported GOP-controlled Senate in its budget.

Nobody at 1366, however, is blaming the DOE for the decision to locate its first factory overseas. The company is simply withdrawing its request for a loan guarantee, Sanderson said.

"As we evaluated the loan guarantee, the additional time and expense beyond what we have already invested, for the negotiation process without any indication of the outcome of the loan guarantee after the negotiations were completed made it difficult to move forward," Sanderson said.

The Trump administration said it was protecting U.S. manufacturing jobs in the solar industry when it announced last month a tariff on solar panels. That tariff, however, has little impact on 1366 since it doesn't make panels, just the wafers that go into panels, and its primary market for wafers is outside the United States. If anything, it could have faced retaliatory tariffs from China on any wafers it shipped to that country.

Sanderson said the company will not yet to disclose the location of its proposed first factory.

The company is eager to get its advanced and innovated solar wafer manufacturing process into full production. The solar energy market is moving fast and 1366 wants to participate in that growth.

"It was difficult to make this decision and put the U.S. factory on the back burner but we were eager to get into production," Sanderson said. "The wafer is now the focus of the industry. It is the one thing that hasn't yet had the cost stripped from it."

For more than four decades, solar wafers have been made by grinding and polishing silicon wafers. The proprietary 1366 process involves pouring molten silicon into glass-like sheets, which allows for thinner, more efficient solar wafers, that are less expensive to make and produce no significant waste.

The MIT-incubated company selected 1366 for its first factory, in part, because it could be powered by renewable energy, the power generated by Niagara Falls.

Sanderson said now that its wafer is in production, the 1366 wafer is being validated in the market.

"In customer trials, on actual production lines, we have seen fantastic results with an average of 20.3 percent efficiency on production lines," Sanderson said.

Throughout a conversation with The Batavian this afternoon, Sanderson said repeatedly that 1366 still intended to build a factory in the United States and when that day comes, GCEDC will receive the first call. She praised the efforts of the GCEDC staff as well as Empire State Development and said this decision was in no way a result of anything GCEDC or ESD failed to do.

"We tried everything we could," Sanderson said. "Everyone tried and did everything they could to make a U.S. factory a reality."

She added, "There’s no doubt in our mind that STAMP is a world-class site. The talent in the region is exceptional and we know that everyone is working really hard to ensure that vision is realized in the community."

The company would have employed 1,000 local workers at full production.

Hyde said commitment to STAMP locally and throughout the state is as strong as ever.

“We also have a number of partners in the public and private sector who I know remain committed to STAMP," Hyde said. "This collaboration is critically important in our efforts, especially as we combine the resources of our economic development partners to market the significant attributes of the Buffalo and Rochester metropolitan areas as one region.

“So, for the GCEDC it is business as usual in our ongoing efforts to get STAMP shovel ready and continuing to market the site to these businesses.”

Rep. Chris Collins issued a statement blaming 1366 for the deicsion without mentioning the DOE's attempt to defund the energy innovation program:

“While they would have been an economic asset to the community, one cannot help but wonder if 1366 Technologies was ever serious about opening a plant at the STAMP site in Alabama. Despite being approved over six and a half years ago and my office facilitating multiple contacts between 1366 and the Department of Energy, the company failed to complete the necessary requirements of their contract and has had to terminate its federal loan offer.

“Despite this result, I remain eager to work with state and local partners to assist in the success of the STAMP project. Genesee County remains an attractive place to locate a high-tech manufacturing business and I am confident the leadership in this community will make this project a success.”

After reading the statement from Collins, Sanderson had this to say: "It's important to understand we were very committed to New York. There was a lot of time and resources around making that U.S. factory a reality. We understand the impact this has on the community. That is not lost on us. That doesn't mean New York can't be a future location and it remains in our plans."

We have requests for comment out to the Department of Energy and Sen. Charles Schumer's office. We will update this story as appropriate.

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."

There continues to be one significant roadblock for 1366 Technologies to get around before breaking ground a new $700 million solar wafer manufacturing facility in Alabama -- getting the Department of Energy's final approval on a previously promised $150 million loan guarantee.

If that loan guarantee isn't finalized, 1366 Technologies, instead of creating 1,000 good-paying jobs in Genesee County, could turn to an overseas location for its manufacturing facility.

"We remain focused on the U.S. and U.S. job creation," said Laureen Sanderson, spokeswoman for 1366. "We continue to work closely with the State and GCEDC, who remain committed to the project, and we’re in active discussions with the Department of Energy. Those discussions have been positive, but we’ve yet to receive a final indication on the status of the loan."

The Boston Business Journal reported today that 1366 just secured another $9 million in funding from investors, bringing the total raised to $89 million. The article also raised the specter of 1366 locating its facility in another country.

The company identified a site in New York for that manufacturing facility, but is still working to officially secure the funding from the DOE. In the meantime, a company spokesperson said, 1366 is exploring the possibility of building its first factory abroad due to the commercial interest its technology has received internationally.

"We are exploring possibilities to build factories internationally, but that has always been part of our plan," Sanderson said, adding, "It is understood that building in the U.S. is only possible if the loan is accessible. If it’s not there, we need to pursue the other options available to us."

The factory would be about 130,000 square feet and located in the advanced manufacturing park under construction in Alabama known as STAMP. It's been a decade-long process by Steve Hyde and the GCEDC to bring STAMP to fruition and 1366 Technologies is the first, and so far, only significant tenant announced for the park.

The company selected STAMP in part because of its location to low-cost, clean energy, specifically, hydropower from Niagara Falls. 

The proprietary method 1366 Technologies uses to manufacture solar wafers was developed at MIT and leads to solar wafers that are more efficient, produced at lower costs and with less waste than the way solar wafers are manufactured currently. The company's immediate goal is to manufacture wafers domestically for export to large solar installations overseas, such as the one completed earlier this year in Japan. 

Hyde said GCEDC remains committed to bringing 1366 to Genesee County.

He issued this statement:

The Genesee County Economic Development Center (GCEDC), along with our U.S. Senate and Congressional delegates, continue to work with 1366 Technologies to help secure the US Department of Energy Loan Guarantee that will enable the company to build their first Direct Wafer manufacturing facility at the Western New York Science and Technology Advanced Manufacturing Park (WNY STAMP).

We believe that the Company has clarified their intentions that their strategy is a U.S. manufacturing first strategy and as such fully aligns with their previous commitments to establish their U.S. manufacturing hub at our 1,250-acre STAMP High Tech Mega-Campus here in Genesee County.

Rep. Chris Collins, through a statement issued by staff, said he is doing what he can to help secure the loan guarantee for 1366.

Congressman Collins has been actively working with partners at the Genesee County Economic Development Center to assist in opening a dialogue with 1366 Technologies and the U.S. Department of Energy. The Congressman is pleased that Secretary Rick Perry recently met with 1366 Technologies executives to discuss this project. These conversations are necessary to make sure that any significant taxpayer investment in the form of a government backed loan is made prudently.

We are hopeful that an understanding will be reached that protects taxpayers while creating economic opportunity in Genesee County. The Congressman will continue in his role in assisting this conversation and always remains committed to supporting efforts to create jobs in Genesee County.

The loan guarantee was promised to 1366 in 2011 but during the transition to the Trump Administration, there were delays related to the transition.

Sanderson said, "There was a transition with the change in administration and that was more challenging than we had expected. However, we’re now having the right discussions and those remain active."

The company is entering a highly competitive solar market that is booming (Solar Employs More People In U.S. Electricity Generation Than Oil, Coal And Gas Combined). Sanderson acknowledged the company, which currently has a small facility in Boston that employs 60 people, is keen to move forward with full production.

"We’re eager to bring the technology to mass production because we know what it can do for the industry and for consumers’ ability to access inexpensive solar power," Sanderson said. "But we’ve certainly taken advantage of the time in the run-up to scale to make additional technical gains. We’ve now surpassed the efficiency of the incumbent technology and have a cost advantage that no sawn wafer can beat. We’ll continue to make gains as the first step – but certainly not the last – in our scaling effort crystallizes."

UPDATE Friday, 10 a.m.: Statement from the office of Sen. Charles Schumer:

“Last month Senator Schumer spoke directly to U.S. Department of Energy Secretary Rick Perry and urged him to reach out to the 1366 Technologies CEO and meet with 1366. Almost immediately after the conversation, Secretary Perry reached out to the CEO and met that following week. Our office remains in very close contact with 1366 Technologies and the Department of Energy,” said Jason Kaplan, spokesman for Senator Schumer.

A company that could revolutionize the solar industry, with manufacturing based in Genesee County, is making progress on bringing its solar wafer technology to market at scale.

This week, 1366 Technologies announced that a Japanese energy company has opened a new power station using wafers manufactured with its proprietary high-performance wafers.

Though work is proceeding to prepare the STAMP industrial park in Alabama for its first tenant, there is no word yet on when there will be a groundbreaking for STAMP or for the 1366 plant, which could eventually employ as many as 1,000 people. The plant is expected to manufacture solar wafers primarily for export to industrial solar installations, such as the new facility in Japan.

Press release:

Silicon wafer manufacturer 1366 Technologies today announced that Japan’s IHI Corporation, through its wholly owned subsidiary IHI Plant Construction Co. Ltd (IPC), has completed the grid connection and begun commercial operation of a 500-kW solar installation featuring 1366’s high-performance wafers. During its lifespan, the array is expected to displace approximately 9,500 metric tons of CO2 from entering the atmosphere. 1366 and IHI celebrated the completion of the system this week at a ceremony in Tokyo.

“This commercial installation delivers all of the expected benefits specific to solar power and then some, the energy payback of an installation featuring Direct Wafer products is accelerated to less than a year due to the fact that our technology uses just one-third the energy,” said Frank van Mierlo, CEO, 1366 Technologies. “IHI has a long history of identifying and adopting groundbreaking technologies, we’re proud the Direct Wafer process is part of that story.”

The array, located in the Japanese prefecture Hyōgo and consisting of IEC-certified modules fabricated by a Tier 1 manufacturer in China, includes more than 120,000 wafers made with 1366’s revolutionary Direct Wafer® process. All the wafers were produced at 1366’s demonstration facility, using the Company’s production-ready Direct Wafer furnaces.

This installation builds on the success at test sites in the United States, Germany and Japan and demonstrates the Company’s ability to run the Direct Wafer process at scale. It also underscores the broad appeal of the technology downstream where customers want advanced, high-quality systems with lower carbon footprints.

“It has been our goal to expand our portfolio of renewable energy systems with innovative technologies that dramatically reduce cost and deliver superior performance of photovoltaic systems. This installation achieves that goal,” said Otani, of IHI Corporation.

The timeline has been pushed back, but expectations are still high for the eventual success of 1366 Technologies, the Bedford, Mass.-based solar wafer maker that anticipates eventually creating 1,000 new jobs in Genesee County.

Even as the process moves along slowly, 1366 continues to go forward.

Last week, the company announced a new record in solar power efficiency for a wafer in their product category; in August it unveiled a new beveled edge on its wafer, which helps retain wafer strength while keeping the wafer very thin.

These breakthroughs will help further reduce the cost of the energy produced by solar panels that use 1366's wafers.

The stated goal of 1366 is to help make the production of electricity from solar cheaper than electricity produced by coal.

That might have seemed like a moonshot-ambition when plans to locate 1366's manufacturing plant in the Town of Alabama were first announced two years ago, but the cost of solar energy has dropped by two-thirds in recent years and there are parts of the world now where solar arrays are producing electricity at a cost below that of coal.

In the rapidly evolving technology field, it might seem like delays in getting a new plant open would cause the business owners to worry about losing precious time, but that isn't the case, according to a spokeswoman for 1366.

"I’m sure you’ve noted this, but our path to commercial success has been methodical from day one," Laureen Sanderson said. "It’s one of the reasons why we’re now in a position to scale in a big way. It’s incredibly important to us that we’re careful stewards of all resources sent our way – private and public – and we think we’ve done a good job of balancing the demands to get to market quickly while taking what we see as essential steps to remove all risk – like getting a customer contract in place before a factory is even built."

The cost reductions achieved by the solar industry so far are largely incremental and the result of increasing scale, not big improvements in the technology. The silicon wafers used in solar panels today are made the same way solar wafers have been made for 40 years. The 1366 process is radically different.

Because the company is built around patented, proprietary technology and processes, officials believe they will come to market with a disruptive and competitive advantage whenever they ramp up to full-scale production.

"Direct Wafer technology is a singular achievement," Sanderson said. "We’re the first and only company to solve this manufacturing challenge. There are many great solar innovations out there but they’re in labs. Science projects. It takes years to move from the lab to the factory floor; most ideas never do. What we’ve achieved isn’t easy and the industry knows that."

What exactly is delaying groundbreaking at the new technology park in Alabama, WNY STAMP, isn't clear.

When we've asked Steve Hyde -- CEO of Genesee County Economic Development Center and the first advocate for a technology park in Genesee County more than a decade ago -- about the delays, he says everybody is continuing to diligently work on the process; there is ongoing progress, and he quotes one of his favorite phrases, "Economic development is a marathon. It isn't a sprint."

A year ago, officials expected to break ground in the spring. In September, Hyde said there would be a groundbreaking in the fall. Now, the earliest estimate is this coming spring.

Reached this morning, Hyde said infrastructure and construction bidding will start after the first of the year. Water service and the main entrance road will be bid out first. 

"2017 will be a busy year for construction," Hyde said. 

Frank van Mierlo, CEO of 1366, told E&E News earlier this year that he expects to be up and running at STAMP by the end of 2017. Van Mierlo reportedly told E&E that "permitting and red tape" have slowed progress.

"We're moving," he said. "It's certainly not moving as rapidly as one might hope." 

"It's going to be a stretch," he added. "The end of the year rather than the beginning. We definitely want to be in construction next year."

The reason everyone remains so upbeat about the prospects of 1366 is it seems like the company has charted a solid business model built on breakthrough technology.

This isn't PepsiCo trying to enter an already crowded Greek yogurt sector with a barely differentiated product and hoping marketing and supply chain alone could win. This is a company entering an emerging industry with growing demand and a process that will substantially reduce the cost of production.

"Nobody is close. We can produce the wafer at 30 cents a wafer," van Mierlo told E&E News. "Even at today's prices, you are still very profitable. At today's prices, nobody else is profitable. That is the point.

"There's no false modesty here," he added. "Our technology is truly revolutionary when it comes to reducing costs."

In his best-selling business book, "Zero to One," venture capitalist Peter Thiel says new businesses should be built around innovations that are a 10-times improvement over anything currently in the market. 1366 seems to be hitting that mark.

"The Direct Wafer process is a dramatic improvement over the way wafers are manufactured today and it’s specific to us," Sanderson said. "(We achieve a) 50-percent reduction in cost and two-thirds energy reduction over conventional (production) methods. Better yet is the product – which costs less and uses less (energy) to make, doesn’t require any tradeoffs in performance."

That's why the recent efficiency tests were so important. 

Efficiency is the measure of how much sunlight that hits a solar wafer is converted into electricity. The 1366 wafer was tested in conjunction with new technology from a partner company, Hanwha Q CELLS Co. Ltd., of Seoul, South Korea.

While there is other solar technology that has achieved higher efficiency, that isn't the norm in the industry.

"In a head-to-head comparison with standard high-performance multicrystalline (HPM) wafers, we exceeded the average performance of that HPM reference group," Sanderson said. "And there are more gains to be had through new wafer features that are possible because we’re able to work at the melt level. There’s no other company in the world able to do that."

In the startup world, the common advice, and the practice often most attractive to potential investors is a company that aims at a specific market segment, an achievable target that promises growth.

For 1366, their approach is to make only wafers (compared to Solar City, opening in Buffalo, that makes not just the wafer, but the entire solar panel and even handles installation) and sell them to companies on an international market that will make panels for industrial solar installations.

That's a very specific market, and 1366 already has customers lined up, most notably, Hanwha, their partner in the recent efficiency tests. The company has also secured an investment from silicon supplier Wacker Chemie.

Silicon, of course, is the key ingredient in making solar wafers. It's a derivative of sand, but unlike the process used to make silicon wafers for four decades, which involves shaving down silicon ingots into the appropriate shape and thickness, 1366 wafers are poured from molten silicon, like glass is made, using techniques developed at MIT.

This is why the wafers that will be made in Genesee County will cost less and produce less waste.

A key reason 1366 picked STAMP as its eventual manufacturing home is the availability of low-cost hydropower, itself an environmentally friendly, renewable energy source. That will also make it easier for 1366 to keep production costs down.

The proximity to Buffalo, however, has invited comparisons between 1366 and Solar City, which is opening at Riverbend and has been an ongoing source of speculation and controversy, but 1366 and Solar City are really very different companies. 

Solar City, as noted, is a vertically integrated manufacturer and distributor -- so much so that company Chairman Elon Musk has merged Solar City with Tesla, his company that makes electric cars. Musk wants to control the entire energy supply chain for his vehicles, from converting to solar energy to powering the batteries that Telsa makes, too.

A big part of Solar City's business model has long been residential solar installations, a market that has been seemingly dependent on state and federal tax subsidies, subsidies that have come under criticism and may not last under the Trump Administration.

While Trump campaigned on a promise to save coal jobs, every cabinet appointment he's made so far, notably Rex Tillerson, CEO of Exxon for secretary of state, and Rick Perry, for the Department of Energy, are hardly friendly to coal. They're interest lies closer to natural gas, currently coal's primary competitor for electricity generation, but that also wouldn't seem to bode well for backers of solar power.

Sanderson said 1366 isn't worried.

"Solar is a global industry and it’s growing rapidly," Sanderson said. "That’s not changing. Our technology will further support this growth as we continue the trend of costs coming down. We help to make solar even more accessible and we want to support this global growth with U.S. manufacturing and U.S. jobs."

There's still plenty of R&D work to do on solar, Sanderson noted, and 1366 received early-stage R&D funding from the Department of Energy.

"It’s important to keep in mind that while we’re a solar company, we’re also a manufacturer," Sanderson said. "We’re looking forward to working with the next administration to create U.S. manufacturing jobs."

In this case, of course, U.S. manufacturing jobs should translate into Genesee County manufacturing jobs. Time will tell.

A groundbreaking ceremony should take place in Alabama sometime next month for the WNY Science, Technology & Advanced Manufacturing Park -- the STAMP project -- complete with state government dignitaries, said Steve Hyde, CEO of the Genesee County Economic Development Center, during a meeting Wednesday of the County's Ways and Means Committee.

It will signal the start of development of STAMP, a planned high-tech industrial center that Hyde first proposed more than a decade ago.

Initial development will be building the infrastructure to support the site's first tenant and serve to attract additional tenants with the dream of eventually creating 10,000 jobs at the industrial park.

The first tenant is 1366 Technologies. With headquarters in the Boston area, 1366 will use a revolutionary manufacturing process to create silicon wafers for solar panels. 

Once the infrastructure work -- roads, sewer, water, electrical -- starts, 1366 will begin the design process for its facility.

Hyde expects there will be a second groundbreaking especially for 1366 sometime in the spring and the plant will be completed by the end of 2017.

Legislature John Deleo asked Hyde to explain why local residents shouldn't be worried about the prospects of 1366 when Solar City, part of the Buffalo Billions project, seems to be struggling.

Solar City and 1366 are completely unrelated projects and the two companies are pursuing very different business models, Hyde told Deleo.

Solar City is building a very large factory to manufacture residential and commercial solar panels that the company will sell itself to a domestic market.

Whereas, 1366 is only making solar wafers and its product will be a component in solar panels built by others for large industrial solar operations in overseas markets.

So far, 1366 has about $100 million in private investment capital, overseas strategic partners and its initial customers.

At full capacity, 1366 is expected to employ about 1,000 people.

For prior 1366 Technologies coverage, click here.

A Boston-based company that has picked Genesee County for the location of its silicon wafer plant announced a major strategic move today that officials say will provide a tremendous positive impact on cash flow.

Wacker Chemie, a supplier of highly purified silicon, is making a $15 million equity investment in 1366 Technologies through the supply of the silicon that will be used by 1366 to manufacture its advanced silicon wafers.

The silicon wafers will be manufactured in a plant at the Science, Technology & Advanced Maufacturing Park (STAMP) in the Town of Alabama through a process that officials with 1366 say will greatly reduce the cost of solar power.

The partnership will also include a technical collaboration between the two companies. Wacker Chemie will provide expertise in silicon as well as facility design, engineering and construction.

“We see the potential for the Direct Wafer technology to provide an excellent contribution to accelerate global solar adoption," said Ewald Schindlbeck, president, Wacker Polysilicon. "1366 has developed a commercially valid answer to a longtime manufacturing challenge. We’re eager to add our high-quality products and bring our expertise to the effort.” 

Frank van Mierlo, CEO of 1366, said the partnership is a good sign for the future adoption of his company's groundbreaking solar wafer solution.

“Commercial traction is gained when technical success and financial support are established within the industry," van Mierlo said. "This partnership with the world’s most technically advanced silicon provider clearly demonstrates market acceptance for the Direct Wafer technology. Wacker’s silicon is the best in the industry and has been a crucial competitive edge for Wacker’s customers. It will do the same for 1366."

The manufacturing solution developed by 1366 offers a significant advantage over traditional ingot-based production technologies, according to company officials. The process makes wafers in a single step, pulling them directly from molten silicon instead of today’s multistep, energy- and capital-intensive approach, resulting in significant wafer production cost savings.

Press release:

Silicon wafer manufacturer 1366 Technologies (“1366”) today announced it has received a $10 million investment from the Hanwha Investment Corp., one of Korea’s leading private equity/venture capital firms with more than $500 million under management. The funds will be used toward the construction of 1366’s first large-scale commercial factory, scheduled to be online in 2017.

“Our Direct Wafer™ technology represents one of the most significant manufacturing innovations in solar, with the potential to propel the industry forward and deliver dramatic cost advantages,” said Frank van Mierlo, CEO, 1366 Technologies. “We are thrilled that Hanwha Investment Corporation, with its deep expertise in and understanding of the manufacturing industry, has invested.

"It is a tremendous validation of our commercialization plans, and a clear signal that we’re poised to disrupt the $10 billion and growing silicon solar wafer market.”

“Hanwha Investment Corporation actively seeks out companies with groundbreaking technologies that transform industries. In just a short period of time, 1366 has moved from proof of concept to commercial-ready technology, achieving technical milestones steadily and rapidly. We believe the 1366 team is well positioned for commercial success,” said Woojae Hahn, president and CEO, Hanwha Investment Corporation.

1366’s Direct Wafer technology is a transformative manufacturing process that offers significant advantages over traditional cast-and-saw wafer production technologies. The process makes wafers in a single step, pulling them directly from molten silicon instead of today’s multi-step, energy- and capital-intensive approach, resulting in significant wafer production cost savings.

CLARIFICATION: We were asked to clarify a prior report that said the Hannah company that is purchasing solar wafers and the Hannah company making the investments in 1366 are the same company. While related, they are not the same company and operate independently.

Press release:

Hanwha Q CELLS Co., Ltd., (“Hanwha Q CELLS”) (NASDAQ: HQCL) and 1366 Technologies, Inc., (“1366”) today announced that they have entered into a supply agreement in which 1366 will supply up to 700 MW of wafers using 1366’s proprietary Direct Wafer™ technology to Hanwha Q CELLS over a five-year period.

This deal follows a year-long strategic partnership and collaborative R&D efforts to commercialize 1366’s Direct Wafer™ technology with Hanwha Q CELLS’ Q.ANTUM cell technology. 1366 will supply the wafers from its planned U.S. manufacturing facility in New York State, scheduled to be online in 2017.

The agreement ensues months of intense technical collaboration between the two companies during which a series of performance records for the Direct Wafer™ technology were achieved. Hanwha Q CELLS and 1366 jointly reached a maximum efficiency of 19.1% using Direct Wafer™products in Hanwha Q CELLS’ Q.ANTUM cell, as independently verified by the Fraunhofer ISE.

“This agreement with one of the world’s most respected and innovative solar manufacturers is, no doubt, a significant milestone for our business. It further demonstrates the compelling capabilities of the Direct Wafer™ technology and the readiness of this innovation, and establishes its long-term bearing on the industry,” said Frank van Mierlo, CEO of 1366 Technologies. “We’ve found a strong partner, Hanwha Q CELLS, and we are extremely proud of the work we’ve accomplished together.”

“This agreement aligns with our continuing efforts to bring about world leading technologies that enable solar energy to be more competitive and more affordable,” commented Seong-woo Nam, CEO of Hanwha Q CELLS.  “We are pleased with the progress we have made together during the past year and excited about the potential of 1366’s Direct Wafer™ products with Hanwha’s cell and module technologies to deliver further cost reductions and LCOE competitiveness to standard multi-crystalline wafer-based modules.”

Provided that 1366 meets certain terms and conditions related to its wafer qualification and timing of delivery as agreed by both parties, Hanwha Q CELLS’s commitment to purchase up to 700 MW of wafers over a period of five years will commence.

1366’s Direct Wafer technology is a transformative manufacturing process that offers significant advantages over traditional cast-and-saw wafer production technologies. The process makes wafers in a single step, pulling them directly from molten silicon instead of today’s multi-step, energy- and capital-intensive approach, resulting in significant wafer production cost savings.

Hanwha Q CELLS' Q.ANTUM technology is based on PERC (Passivated Emitter Rear Cell) architecture and includes many additional technological features for maximum energy yield under real conditions. Q.ANTUM significantly enhances power output, low-light and temperature-behavior, while at the same time offering all of Hanwha Q CELLS' VDE certified quality standards like Anti-PID protection, Hot-spot protect, and Tra.Q laser marking.

Additional Note: Hanwha was part of a Series C funding round in 2010 that raised $20 million in venture capital to back 1366 Technologies. It was announced at that time that Hanwha planned to become a 1366 customer once production began. The latest available information online indicates that 1366 has raised more than $70 million from private investors.

When the 1366 Technologies plant opens in Alabama in 2017, it will be profitable on the first day of operation, Brian Eller, VP of manufacturing, revealed today during the annual meeting of the Genesee County Economic Development Center at Batavia Downs.

The solar wafer manufacturer has recently completed contracts with solar panel manufacturers that will fulfill orders for 60 percent of plant's production capacity, Eller said.

"This is part of the steady, deliberate process," Eller said. "We keep knocking them off to reduce the risk to the business, because if you sell everything before you start, then you execute, you don't have to go to market and figure out your market."

Eller was the keynote speaker for the annual meeting, which was attended by more than 350 people.

During his 20-minute presentation, Eller described the methodical approach 1366 Technologies has taken to build its business and the foundation for success. It's a classic start-up model: Begin with a prototype product and get it to market and see how it does, concentrate on a single product, then target a niche of customers, then scale your production once you're ready to reach a market with the potential to achieve substantial returns on investment.

The company was founded in 2008 in Bedford, Mass., where it set up a small, prototype plant to test its proprietary process for manufacturing silicon wafer chips for solar panels. That plant has produced and the company has sold thousands of wafers.

With the process established, 1366 began looking for a site appropriate for its business, settling on Alabama and GCEDC's STAMP project because of the promising local workforce, proximity to universities and the availability of clean, hydro energy.

"One of STAMP's strengths is the talent pool in the region," Eller said. “You know, the thing about changing the world is you need skilled people around you."

The company is planning a $700 million investment in its new facility, to be constructed on about 8 percent of the 12,500-acre WNY Science and Technology Advanced Manufacturing Park. STAMP is the brainchild of Steve Hyde, CEO of GCEDC. The center is assisting in the project with tax abatements worth a potential $97 million over 10 years. The state and federal government have also pledged millions for infrastructure at the project site, which GCEDC and regional economic development agencies are working to fill with other high-tech manufacturers.

When the plant is at full capacity -- producing enough wafers each year to provide three gigawatts of electricity -- it will employ 1,000 people. In the near term, 1366 will hire 150 people, though Eller said there isn't a timeline on the hiring process yet. The company is still in the process of hiring consultants, planners, architects and engineers.

Eller did promise the development process will be public and transparent and that all who compete for contracts on the project will do so on a level playing field.

Eller is full of confidence that 1366 will revolutionize solar technology.

"Our process slashes the cost of making the wafer in half and in doing so drastically reduces the cost of solar energy," Eller said. "Those reductions, well, they accelerate adoption. We believe solar will be ubiquitous. It will displace coal as the cheapest fuel source on the planet."

The current process, which the industry has used for nearly four decades, requires multiple steps, using several machines and takes days. The 1366 process involves one machine that will produce a new wafer every 20 seconds.

The technology was developed at the Massachusetts Institute of Technology. Instead of cutting and grinding solar ingots into flat wafers, which takes energy and produces waste, the 1366 process melts the silicon and floats it into thin layers that harden into silicon wafers.

Eller compared it to the Pilkington float glass process developed in the 1950s and still the process used today for manufacturing flat glass.

"Manufacturing process innovations like ours have true staying power," Eller said. "They simply don’t come along every day."

The solar industry is booming the world over.

Last year, 59 gigawatts of new solar capacity was brought online. That's the result of 240 million solar panels being produced. Eller said that's a big number, so to help understand it, he said, that's more electrical capacity than needed for a year by the entire State of New York.

"We make the most expensive part of the solar panel for half the cost," Eller said. "That was a hard problem to solve, but we've done it. Now we're free to pursue an $8 billion and growing solar market without distraction."

Eller acknowledged that there has been some bad news in the solar industry in recent years, with companies going under or changing directions, but Eller said the slow and deliberate process 1366 has pursued to build the company puts it in a position to succeed.

"The industry consists of exceptional businesses, both established and new, that are efficient, innovative and motivated," Eller said. "To be young in solar is not without its challenges and we are aware of other companies in solar that struggled to compete globally, focused on the wrong technologies or just simply scaled too quickly," Eller said. "We are focused on bringing a highly innovative product to market with deliberate and steady progress."

CLARIFICATIONS:

The folks at 1366 asked us to clarify, by "Day 1," they mean when the first plant is at full production, not the day the plant doors open. There will be a three- or four-month ramp up period to bring the plant up to production levels, which includes hiring and training workers.

Also, in reference to the amount of power from last year's productions of solar panels, we misunderstood.  It's not enough electricity to power of all of New York. It's enough for all New York households.

For prior coverage of 1366 Technologies, click here.

Above, silicon nuggets. Silicon is produced from super heating silica, commonly found in sand, but also found in clay and rock (it's the most common mineral on the planet). When 1366 started to develop its process, silicon was still not a common wafer ingredient, but now 90 percent of all solar wafers manufactured today use silicon.

Sen. Mike Ranzenhofer (above) and Assemblyman Steve Hawley (below) both spoke briefly and praised and thanked each other for their united effort to help provide the legislative support to bring 1366 to STAMP.

Steve Hyde.

Ray Cianfrini, chairman of the Genesee County Legislature.

GCEDC presented an Economic Development Award to the Batavia Development Corp., represented by Ray Chaya, the City of Batavia, Eugene Jankowski, and the Town of Batavia, Patti Michalak. Steve Hyde, back row, and GCEDC Board Chairman Paul Battaglia to the right.

Press release:

The Genesee County Economic Development Center and 1366 Technologies have developed an online intake form for local companies interested in pursuing potential supply chain/operational opportunities. The 1366 Technologies solar wafer manufacturing facility will be constructed in the town of Alabama and is scheduled to open in 2017.

“There is a tremendous amount of talent and skill in the Genesee County area. We’re excited to begin the process of identifying those companies across the region that will contribute to the success of our project and our operations in Alabama,” said Brian Eller, COO, 1366 Technologies.

The form can be accessed atwww.1366tech.com or www.wnystamp.com.

“The exciting thing about economic development is not only the direct jobs created by companies like 1366 Technologies, but the indirect jobs that are created through supply chain opportunities,” said GCEDC President and CEO Steve Hyde.

informANALYTICS, an economic development software tool, calculated that approximately 1,600 indirect jobs will be created. The overall economic impact of the direct, indirect and induced jobs is expected to be in the range of $1.5 billion.

One of the ways in which 1366 Technologies will conduct outreach to the supply chain network is through the marketing and business networking assistance of Buffalo Niagara Enterprise (BNE) and Greater Rochester Enterprise (GRE), both of which played a key role in attracting the company.

“Because of the highly skilled and talented workforce in the Finger Lakes and Western New York regions, 1366 Technologies is not going to have any problems finding the right partners to make their operations in New York State a tremendous success,” said Mark S. Peterson, president and CEO of GRE.

“The launch of the 1366 Technologies intake form provides great opportunities for Western New York companies and their employees to capitalize on this exciting high tech industry,” said BNE President and CEO Thomas A. Kucharski. “It also reinforces the longer term value of our economic development efforts by reminding us that 1366 Technologies’ economic impact extends well beyond their initial investment and job creation. That benefit will continue to grow with the success of this great company in our region.”

After the questions, concerns, challenges and outright objections to 1366 Technologies coming to the Town of Alabama to build silicon wafers to capture the energy of the sun, resident Dave Dunn said, "I think we've all forgot one thing here tonight: Thank you for coming here."

That statement drew a round of applause from most of the 75 or so people who attended the public hearing Tuesday night on proposed tax incentives to help Bedford, Mass.-based 1366 Technologies build its $700 million facility on 105 acres of the planned high-tech park known as STAMP (Science & Technology Advanced Manufacturing Park).

There were only a handful of speakers during the hearing, and only a couple more who raised objections during a follow-up question and answer period, including one man who stormed out during an impassioned speech by Steve Hyde, CEO of the Genesee County Economic Development Center, on the need for economic development to help keep our children in Western New York.

The state is planning on spending more than $5 million on land acquisition and infrastructure to make STAMP possible, and 1366 could receive another $56 million in incentives from New York along with tax abatements of more than $35 million through GCEDC.

It is those local incentives that the GCEDC Board will be asked to approve in an upcoming vote and last night's public hearing was required in advance of it.

Mark Masse, VP of business development for GCEDC, opened the hearing with an overview of the financing and financial impact of the proposed 1366 project.

The venture is expected to lead to 1,000 jobs at the plant within a few years, with another 1,593 jobs generated by companies that will provide services and support to the new company, and some 2,600 jobs created by local economic growth.

That's more than 6,500 local jobs within 10 years, Masse said.

Entry-level jobs will start at $16 an hour, with production jobs going up to $24 an hour based on duties and experience.

The 1366 payroll is expected to reach nearly $40 million. The indirect payroll could exceed $60 million and induced jobs would add another $30.3 million in payroll, for an anticipated increase in local payroll of $130 million. (CORRECTION: In my notes, I left off some zeros. The payroll numbers have been updated to correct that mistake.)

To help finance the project, GCEDC is proposing a PILOT -- payment in lieu of taxes. That's a break on the property tax. There would be property tax due on the current assessed value of the 105-acre parcel, but there would be no new taxes on the increase in assessed value over the first two years of the project. The taxes would then gradually increase over the next eight years. 

There are also proposed tax abatements on the sales tax on construction materials as well as relief from the mortgage tax.

Masse then turned the floor over to Brian Eller, chief operations officer for 1366, who shared some of his company's plans and an overview of what 1366 will manufacture.

Eller explained that 1366, working with scientists at MIT, have developed a whole new manufacturing process for silicon wafers -- the main component of solar panels, that the company believes will be cheaper to manufacture and produce less waste than the process used by every other company in the world.

Silicon is the second most plentiful mineral on Earth and is usually extracted from sand. For solar wafers, manufacturers receive ingots of silicon that are typically cut and ground into square objects. 

That's an extremely wasteful production process, according to a video Eller played for the audience. Much of the silicon is wasted, as well as the blades and diamond-tipped twine used to cut the wafers.

The process developed at MIT involves melting the silicon and rolling out flat wafers, much like modern glass manufacturing.

The process is a third faster and a third cheaper than current techniques, and no silicon goes to waste, and it uses less energy.

The goal of 1366 is to use its technology to produce wafers that eventually make solar power as cheap to consume as coal energy.

What 1366 isn't doing is making entire solar panels. They are only making the wafers, and they aren't making solar panels.

Elon Musk's Solar City plant, going up in Buffalo, will make rooftop panels, but 1366 isn't producing wafers for rooftop panels, so there isn't currently an opportunity for the two companies to work together directly. The wafers produced by 1366 are intended for industrial solar energy farms, which currently makes up 70 percent of the worldwide solar energy market.

One speaker during the public hearing expressed concern that 1366 would get all of these tax breaks, build this big building, and then pull out like Pepsi did with the Quaker Muller Dairy plant.

There are, however, some significant differences between the Quaker Muller operation and 1366's plans. Pepsi and Muller entered a market that we now know was saturated in an industry that is so competitive that profit margins are always squeezed. There was no chance for Muller's imitation Greek yogurt to achieve a dominant market position.

In his best-selling business book, "Zero to One," venture capitalist Peter Thiel says new businesses should be built around innovations that are a 10-times improvement over anything currently in the market. Thiel also advises startups to aim for only a segment of a market and achieve dominance in that segment before growing. Pepsi and Muller appear to have violated both of those guidelines by entering a market that already had dominant manufacturers, such as Chobani, Dannon and Fage, and aiming for a share of the entire market, not just a segment where it might have a chance to dominate. 

Eller thinks that 1366's lower cost, less wasteful process is that 10-times improvement Thiel recommends (though he hadn't yet read Thiel's book when asked about it) and that 1366 is going after a segment of the market where it can achieve dominance.

Only a portion, less than $100 million, of $700 million required to build the 1366 Technologies plant to full capacity is coming from public investment. There is also a $150 million loan guarantee backed by the Department of Energy. When the project was announced at Genesee Community College in October, company CEO Frank van Mierlo indicated he was investing his own money in the project. The company has reportedly raised $70 million in venture capital from investors such as Hanwha Chemical, a major user of silicon wafers, as well as from Ventizz Capital Fund, North Bridge Venture Partners and Polaris Venture Partners. The company has not discussed any other efforts to raise additional capital or the timing of capital needs. They would not need the entire $700 million in the bank to start construction.

Construction is expected to start in May or June.

The first jobs should be filled in the fall or early winter of this year, with hiring continuing through the middle part of 2017 and then more jobs added as production capacity is increased.

Eller will move to here from Bedford to join the ranks of the locally employed, along with as many as five current 1366 managers and executives, though the company will remain headquartered in Bedford. That's also where the company will continue research and development operations.

There was a bit of discussion between Eller, Masse and meeting attendees about workforce development and who will get hired at the new plant. 

Lorna Klotzbach had several objections to the proposal, among them were questions about whether there were really sufficient potential employees in the region. She also shared with some other speakers a concern that STAMP was converting farmland and wildlife refuge into industrial land.

Al Files, who would later get up in a huff and storm out during Hyde's speech, said he thought it made a lot more sense to build where there's already big buildings and infrastructure.

"In my opinion, I think it's stupid," Files said. "We're wasting all of this property when it could be built in Rochester, Buffalo or Batavia."

Eller said 1366 was attracted to STAMP, out of 300 locations considered, for two primary reasons. First is cheap and clean hydroelectric power, and then there is the regional workforce. Eller said the company hired a consultant who studied a number of variables for several possible plant locations and STAMP scored the highest for workforce potential.

Creating local jobs and reversing two generations of economic decline is what STAMP is all about, Hyde said.

"At the end of the day, what drove us to work so hard to attract a company like 1366 to our community and our region is creating jobs for our kids so they can either stay here or come back home," Hyde said. "All the rest of these questions are good and relevant, but if we take a little look at the big picture, we’ve all been losing tax base and these guys are going to start that trend of turning that around. 

"We can’t guarantee that companies are going to be successful, but even with the situation in Batavia, where Muller Quaker was, we built that ag park, two companies came in and spent over $200 million there. The market didn’t work. They entered the market late. They ended up having to shut down and that’s a disappointment, but the beauty is, one of the best dairy companies in the nation is coming in because that ag park is there and they're filling it back up and probably hiring more people than Muller ever would have. The investment model that we’ve used over the last decade is working. It’s creating good jobs for our people and our community. It’s creating tax base.

"I just wanted to paint a little bit of the bigger picture," Hyde added a few sentences later. "We’re absolutely fortunate to have a company like 1366 be willing to come here and start to build that high-tech, entrepreneurial ecosystem. It will mean a lot of jobs for our kids. … I’ll tell you right now if we get a thousand jobs from this company over the next decade, and that turns around to be about four thousand jobs all over this area, you’re going to see an economic boom around here that we haven’t seen in 50 years."

At which point, Files interjected, "This is an agricultural area. This is not a manufacturing area."

Hyde said projects like 1366 will take the pressure off of ag to support the entire local economy, and that the land the plant will use is less than 3 percent of the available acreage in Genesee County, and it's the least productive land in the county.

"We looked at all of that," Hyde said.

But Files was no longer in the room to hear it.

I couldn't find online the video Eller showed, but in looking for it, I found this interesting video.

Press release:

The Board of Directors of the Genesee County Economic Development Center (GCEDC) authorized a public hearing for 1366 Technologies, Inc., and approved a final resolution for an amendment to an original application for assistance from Manning Squires Hennig Co., Inc., at the agency’s Dec. 17 board meeting.

1366 Technologies, Inc., plans to build its first commercial Direct Wafer™ production plant at the Science and Technology Advanced Manufacturing Park (STAMP) in the Town of Alabama.

The project includes the construction of a new 130,000-square-foot manufacturing facility that will grow to eventually create 1,000 full-time jobs and approximately another 5,000 construction and indirect and induced jobs. The total economic impact is preliminarily estimated to be in the range of $1.5 billion over the next 10 years.

1366 Technologies, Inc., is seeking approval for approximately $34.7 million in sales, mortgage and property tax exemptions. The planned capital investment will total approximately $700 million.

“As the largest economic development project in the history of Genesee County, 1366 Technologies will undoubtedly be a game changer in establishing our region as a major high-tech manufacturing hub,” said GCEDC Chairman Paul Battaglia. “This project also will create hundreds of manufacturing jobs and indirect supply chain jobs not to mention hundreds of jobs throughout the construction process.”

The GCEDC board also approved amended incentives for Manning Squires Hennig Co., Inc., a well-known general contractor in Finger Lakes and Western New York regions. The company will expand its corporate offices and maintenance facilities in the Town of Batavia by up to 5,000 square feet, as well as renovate its existing shop and office space.

The project was approved for sales tax, mortgage tax and property tax exemptions totaling $215,529 in incentives. The project’s capital investment is approximately $2.2 million.

“We are pleased to see continued investments being made to improve the facilities of existing companies like Manning Squires Hennig in the Town of Batavia,” said Steve Hyde, president and CEO, GCEDC. “We remain committed to help existing businesses in the County expand their operations in our ongoing efforts to enhance the business climate throughout the region.”

In other agency business, the board approved a 2-percent salary increase for all GCEDC staff for 2016, as well as an increase for the GCEDC office manager.

Video produced by Greater Rochester Enterprise covering yesterday's announcement at GCC.

Frank van Mierlo is clearly a man who believes he has a role to play in changing the world.

The phrase "change the world" did, in fact, pass over the lips of the solar energy entrepreneur once today while he addressed a room full of local and state dignitaries in Stuart Steiner Theater at Genesee Community College. Van Mierlo was there, joined by Gov. Andrew Cuomo, to unveil ambitious plans for a $700 million investment by his company to build a silicon wafer factory on 105 acres of Genesee County land that could employ 1,000 people as soon as 2017.

Even the name of his company, 1366 Technologies, is a homage to van Mierlo's far-reaching global ambitions. Sunlight falls on the planet at the rate of 1,366 Watts per square meter, hence 1366. The number is significant because at that rate, the sun sends us 130,000 terawatts of energy each year. We only need a fraction of that, 17 TW, to power civilization.

"We need to rapidly deploy solar," van Mierlo said in an interview after the announcement. "We need to grow this industry at 30 percent a year. If we do that and we keep growing at 30 percent a year, by 2030, we will produce enough solar energy to power the planet."

And at a price cheaper than coal.

The solar energy market has been growing by 30 percent a year for 30 years, with rapidly improving technology, and like the power of compound interest, the rate of advancement is seemingly -- seemingly -- accelerating.

The technology that powers 1366 was incubated at the Massachusetts Institute of Technology and van Mierlo describes it as a game changer. The company's process cuts silicon waste, reduces the expense of production by 50 percent and takes a third less energy to produce a wafer than current manufacturing techniques.

Ely Sachs, a former MIT professor, is a partner in 1366 and the engineer behind the process 1366 uses to create its wafers. Rather than make clumps of silicon that are carved and cut into wafers, as is common in manufacturing solar wafers now, the 1366 process is more like making sheets of glass, poured directly from molten silicon.

The goal of 1366, van Mierlo said, is to make solar more affordable than coal.

"When solar was first introduced in 1970s, the cost was $7 per kilowatt hour," van Mierlo said. "A kilowatt hour, a little bit of a wonky term, but if you take an old-fashioned 100-watt lightbulb, you leave it on for 10 hours, that's a kilowatt hour. At the time, $7 per kilowatt hour, was extremely expensive. Now, 40 years later, unsubsidized, the cost on a good installation, in a sunny area, the cost is down to 7 cents per kilowatt hour.

Coal is currently about 3.2 cents per kilowatt hour.

The word unsubsidized is important. Solar may be one of the most heavily subsidized industries in America right now.

While states, including New York, offer tax credits for consumers and businesses to install solar panels, the federal government offers a 30-percent tax credit, but that's a tax credit set to expire next year and there is opposition in Washington to extending it. There is some concern that the solar industry has already grown "too big to fail" and ending the tax credit will cost more than 100,000 jobs nationally.

The political winds of the issue leave van Mierlo undaunted. Solar is simply an imperative society must pursue if we're going to change the world.

"A 30-percent growth rate only works when it's a team effort, so it's absolutely essential that everybody pitches in," van Mierlo said. "People like us have to pitch in. We have to come with the technology and the innovation. We have to deliver the cost reductions and we absolutely need broad support to keep growing fast enough. In the end, this becomes a self-fulfilling prophesy. If you believe in it, you support it, the cost will come down and it will bring economic prosperity. If you say it's never going to work and you walk away from it, well, then it will become impossible to make progress and that also becomes a self-fulfilling prophesy."

Cuomo has bet big on solar, backing a $1 billion investment known as NY-Sun and WNY is now poised to become a hub of solar energy production. Earlier this year, Solar City began construction on a 1.2-million-square-foot solar panel factory in Buffalo with the promise of creating 1,400 jobs. A major investor in Solar City is Elon Musk, the entrepreneur who helped launch PayPal and used the fortune that company brought him to launch Space X and Tesla Motors. Officials with Solar City said just a week ago that the panels it will produce in Buffalo will be the world's most efficient, using its own proprietary technology.

Musk is well known in tech circles for dreaming of saving the world through technology. Like Musk, van Mierlo is leveraging prior business success to help fund his own plant-saving ambitions. Prior to cofounding 1366, he owned a robotics company, again based on technology developed at MIT, that he eventually sold.

"It's true that I have some economic freedom, and working on something that matters, that's just a fun thing to do," van Mierlo said. "Given a choice, you outta do something that is worthwhile. Energy is an interesting problem and one that needs solving and I think we're going to play a big part in the solution."

The new 1366 plant will take up only about 8 percent of the 12,500-acre WNY Science and Technology Advanced Manufacturing Park -- STAMP -- in Alabama, a project Genesee County Economic Development Center CEO Steve Hyde has been working on for more than a decade. Nearly every speaker today, including Cuomo, Empire State Development CEO Howard Zemsky, Sen. Mike Ranzenhofer and Assembly Majority Leader Joseph D. Morelle praised Hyde's vision and tenacity in creating and sticking with STAMP, even as doubters and naysayers predicted it would never work.

"This is a game changer," Cuomo said. "A hundred-and-thirty-thousand-square-foot building. At the end of the day, as many as 1,000 jobs. Quality jobs. High-tech jobs. Well paying jobs feeding off an educated workforce being nurtured by some of the great educational institutions in this state. That is the future.

"And the way it happened is the way it should happen," he added. "The IDA worked with the county. The county worked with the region. Two regions collaborated. Western New York and the Finger Lakes, not competing, but actually collaborating and getting a world-class entrepreneur with a phenomenal product that not only can create jobs and make money but can also make this world a better world."

Van Mierlo said when the 1366 plant is fully operational, it will churn out enough wafers each year to generate three gigawatts of power. A nuclear power plant, by comparison, might generate a single gigawatt of power each year.

Increased production and distribution will help bring the cost of solar energy down, which is what van Mierlo said he is really after.

"When solar is 2 cents a kilowatt hour, we can pay for installations that are less than ideal, can pay for energy storage and you will end up with a clean solution that is actually affordable," van Mierlo said. "I'm a firm believer that it's actually possible here to have a solution that helps the economy, but it's not going to come easy.

"The important thing now: Manage the energy supply so that it doesn't threaten life on the planet and that we end up with a solution that doesn't compromise our economy either. We absolutely need investment. We need support. But we also need to bring the cost down so it helps the economy and not just a continuous investment plan."

With the first project scheduled to break ground in the spring, the state will now release some $33 million in grant money pledged to create the infrastructure -- roads, sewers, utilities -- necessary for STAMP to attract manufacturing businesses. While 1366 will benefit indirectly from this investment, the direct subsidies 1366 will receive are those frequently approved by the GCEDC board, from a reduction in taxes on the increased assessment of the property (and the increased assessment will be substantial in this case), to mortgage tax relief to sales tax abatement on materials. The total package will be worth $97 million over 10 years.

Those incentives certainly played a role in 1366's decision to come to Genesee County, van Mierlo said, but he was also attracted by the workforce the area's universities can provide, the central location between Rochester and Buffalo and, most importantly, the inexpensive, clean energy provided by Niagara Falls.

"Hydropower is a real attraction and will be one that is a real advantage to us," van Mierlo said. "It cuts the cost of making the wafer by a factor of three and it's clean. The use of hydropower means there is no C02 at all. Steve Hyde calls it 'clean to green,' and that's a phrase that has really come to life."

Now that 1366 is coming to STAMP and boosters have a real project to talk about with site selectors and potential tenants, it's going to get easier to attract the next business into the park, both Hyde and Mark Peterson, CEO of Greater Rochester Enterprise said.

Those who make decisions about where to construct high-tech facilities are going to become believers in STAMP now, Peterson said.

"People are going to say, 'wow, holy cow, this is real,' " Peterson said. "This a mega site, 1,250 acres. You don't have very many of those with power and water to them in the world, so we're on the world stage right now and this is only going to make us more competitive. Genesee County is right in the middle of Buffalo and Rochester. This is going to be the place to be."

Peterson said computer models run by GRE indicate the 1366 plant, with an economic multiplier effect, will generate more than $4.3 billion in spending regionally over the next five years.

Like the governor, Hyde called the 1366 announcement a "game changer."

"This is a new day," Hyde said. "We have technology companies to the left in Buffalo, to the right in Rochester, and now they're right here right now. Where else would you rather be today? We have opportunities through investments and technology and terrific companies like 1366 Technologies that are going to be here for years and create thousands of high-paying jobs for our kids."

Gov. Andrew Cuomo.

Steve Hyde flanked by Ray Cianfrini, chairman of the Gensee County Legislature, and Mark Peterson, CEO of Greater Rochester Enterprise.

Members of Genesee County SCOPE were set up on East Saile Drive, across the road from the County Airport, prior to the governor's arrival in Batavia, to protest the SAFE Act. There were also picketers on Bank Street Road, on R. Stephen Hawley Drive and just outside the GCC entrance.