FORT COLLINS - A week after announcing that next year it would build a plant employing at least 500 people in high-paying manufacturing and engineering jobs, AVA Solar Inc. went back to the quieter work of preparing for its commercial launch.

When, and if, the Fort Collins-based company proves a mass-production process of turning ordinary sheet glass into solar power generating cells, it will enter an arena that is becoming ever more competitive.

"We've said what we want to do," said Russ Kanjorski, AVA's director of strategic planning. "Now we have to hit some milestones, things we can't describe publicly. We have to execute, and deliver."

AVA, founded by three Colorado State University mechanical engineers led by professor W.S. Sampath, most likely will build its plant at the southwest corner of Prospect Road and Interstate 25, forming the nucleus of a larger CSU center for renewable energy research and production spreading over about 100 acres.

The land is owned by the city of Fort Collins, but city and university officials have said they are optimistic about closing a deal that will give the university control of about 100 acres at the prominent highway junction between the Colorado Welcome Center and I-25.

The company's technology, a process of depositing a thin film of photovoltaic material on glass, is not unique. About a half dozen major solar-energy players use the same chemical compound, cadmium telluride, as the active ingredient in the thin-film deposition.

But the enclosed, automated and scalable manufacturing system, for which AVA holds its most valuable patent, will give the company a distinct advantage once its capabilities are proven, company officials say.

Beyond the plant that company and university sources say will produce panels with the capacity to produce 200 megawatts of power during its first year, or enough for 48,000 homes, the company's ultimate objective is on a much grander scale.

Pascal Noronha, AVA's president and CEO, offers as a guide to the company's desired future a 50-page report commissioned by the National Renewable Energy Laboratory in Golden that describes super-large-scale solar power generating centers.

"This is the direction we would like to move in," he said.



Enter 'Solar City'

The NREL report, written by two Hewlett-Packard Co. researchers based in Palo Alto, Calif., details a "Solar City" factory that will produce panels with a generating capacity of up to 3.6 gigawatts - or billion watts - of power. That amount exceeds by four times the volume of the entire solar-panel industry in 2004, the year the report was written.

The report's authors predicted that current technology, such as that offered by AVA, and high-volume manufacturing capacity "can hit a price target of $1 per watt ... as the total price for a compete and installed solar energy system."

That number is six to nine times lower than 2004 prices, and reaches parity with the lowest-cost electric power today.

The factory that the authors describe would include an on-site glass-manufacturing center capable of producing 30 million square meters of sheet glass annually, or enough to cover 11 square miles.

The key to cost reduction that would make such a vast factory feasible is the choice of glass, rather than expensive crystalline silicon, as the platform for the generating panels.

Thin film on glass will emerge as the dominant technology in the next few years, according to participants at the Clean Tech Conference sponsored by New York investment house Cowen and Co. Sept 6.

On hand were top executives of First Solar Inc. (Nasdaq: FSLR), an Arizona company that is already producing thin-film solar panels at plants in Ohio and Germany and will soon open another in Malaysia.

Noronha, in announcing AVA's plans for commercialization, said he is undaunted by First Solar's quick start.

"First, there is room in this market for more than a few players," he said. "Second, we are proving to be the low-cost, scalable technology."



'Frustrating paradox'

A recent investment analysis of the photovoltaic industry, prepared by Deutsche Bank Securities Inc., explored the relative fortunes of the various companies, including AVA, pursuing the solar market. The report described a "frustrating paradox:" A trillion-dollar market, but without an economically proven way to tap it.

The July report predicted, however, that with thin-film technology leading the way, the solar industry could reach "grid parity," meaning current cost of transmitted electric power, within five to seven years.

But with AVA's announcement in late August that it had cracked the $1-per-watt barrier, that time period will be compressed even more.

The track record of First Solar is one that provides a carrot for the other companies entering the thin-film photovoltaic market, AVA included.

First Solar went public in November 2006 with an IPO price of $20, but by early September shares were trading five times higher, just over $100 per share.

Within the next several weeks, city and university officials expect to make an announcement regarding the land swap that will pave the way for AVA's new plant.

In the meantime, company officials said to expect little in the way of additional details about their manufacturing plans during the near future.

"It's really time for us to stop talking and start doing," Kanjorski said.