DayStar looks to expand thin-film fab

Newark, Calif.-based DayStar Technologies (NASDAQ: DSTI) is planning to expand its thin-film production line because of its success in hitting technological milestones, company executives said today on a conference call.

DayStar scheduled the call to update investors on its technology for producing copper-indium-gallium-selenium (CIGS) thin-film solar panels. Shares were down nearly 7.5 percent at close of trading today at $2.11.

DayStar expects to begin using its new production line before the first quarter of 2009 and to reach commercial production at its 25 megawatt-capacity plant by the third quarter, CEO Stephan DeLuca said. At that point, DayStar expects panel efficiency to be 10 percent but later reach 11 percent.

The company is now exploring ways to pay for an expansion to 80 to 100 MW in its current building by 2011, DeLuca said.

The potential expansion is an excellent sign, according to Jonathan Hoopes, managing director of Energy Technology Research at ThinkPanmure, who issued a report today with a “Buy” rating and a target price of $7.50 for DayStar.

“The fact that they are evaluating ways to accelerate a more-rapid expansion suggests they are tracking to plan,” Hoopes told the Cleantech Group. “It’s an opportunity to invest very near alongside of well-respected venture capitalists in the space, who are making big bets in thin-film companies who may or may not be ahead of DayStar.”

The CIGS thin-film sector has become extremely competitive in recent months, with companies such as Solyndra and Nanosolar saying they’ve raised hundreds of millions of dollars to ramp their production lines (see Solyndra reveals thin-film solar tubes and see Nanosolar grabs $300 million for utility solar). The companies have been secretive about their proprietary production processes, but none are producing at commercial scale.

Hoopes said DayStar is still very competitive in the sector because it’s using a well-known process, known as sputter deposition, to evenly distribute the CIGS material on glass.

“Sputtering has been proven to work in other applications and be scaleable. DayStar’s approach is not to take a lab process and make it commercial, but to take a commercial process and apply what they’ve learned in the lab,” Hoopes said. “It’s by no means game over, and it’s going to be an interesting time watching this space.”

DeLuca said DayStar is satisfied with the deposition monitoring and thermal management of its Big Baby production line, which has addressed the technical risks of scale-up.

If DayStar can raise the capital to expand to 100 MW capacity production, the company could produce panels at $1 a watt, DeLuca said. He said the company would likely do some sort of strategic financing but could use conventional debt or equity if available.

Hoopes said a joint venture partner is also a likely possibility for financing an expansion.

DayStar has had somewhat of a tumultuous past.

In 1996, the company promoted DeLuca, then COO, to CEO just two weeks after then-CEO and DayStar founder John Tuttle revealed that DayStar had just a few months of cash left during the first quarterly conference call (see DayStar changes CEO). 

The company was able to secure funding later on, and Tuttle stayed on as chief development officer for another three months before resigning in February 2007 (see DayStar gets commitments for additional capital and DayStar founder resigns, restructuring continues).

After another three months the company workforce was downsized by 30 percent and the headquarters moved from New York to Silicon Valley (see DayStar trims staff, refocuses).

In March, the company had mixed news: it lost its CFO, Raja Venkatesh (see Fudd, Fuwa and Fworida) but German company juwi agreed to buy 25 percent of all the thin-film solar DayStar produces through 2011 (see Juwi plans to buy thin-film solar from DayStar).

Hoopes said much of the bad news seems to be behind DayStar. The company has changed focus from depositing CIGS on flexible materials to glass substraights, as well as adding staff such as COO Ratson Morad, who was one of the founders of Solyndra.

DayStar expects to announce its most recent financial results in early November.