The headline was supposed to read, “Massachusetts startup breaks ground on U.S. production factory for revolutionary solar technology.”

The story’s top would have noted that an Energy Department loan guarantee and state incentives helped pave the way for 1366 Technologies’ new manufacturing plant in upstate New York, where 1,000 workers would produce silicon wafers for solar photovoltaic cells at about half the cost of existing cells.

Instead, that story was spiked Friday, when 1366 Technologies announced it had abandoned a decadelong quest to embed its production process in a new U.S.-based plant.
Frank van Mierlo, founder and CEO of the Bedford, Mass., company, said in a statement Friday that while he appreciated DOE’s continued willingness to negotiate a loan guarantee, the negotiation had taken too long and was costing too much, with no certainty of a deal. So the company broke off negotiations Jan. 31, it said yesterday, and will open its first plant somewhere abroad, where it has already lined up possible sites.
“The decision, which was driven by the need to conduct a lengthy and expensive renegotiation without any indication of the outcome, directly impacts our plan to build a New York plant,” van Mierlo said.
A DOE official, speaking on background, said the Trump administration’s determination to kill the DOE Title XVII loan guarantee — the vehicle for DOE’s pledged $150 million support — had not chilled DOE’s willingness to conclude an agreement: Funds for 1366 Technologies were still available, he told E&E News.

But there was no dispute that 1366 Technologies had a table-turning technology that was ready to go, with prior backing from U.S. venture capitalists; the Obama administration’s Advanced Research Projects Agency-Energy (ARPA-E); the administration of New York Gov. Andrew Cuomo (D); and leading German, Japanese and South Korean energy firms. “There’s no false modesty here. Our technology is truly revolutionary when it comes to reducing costs,” van Mierlo said.

Instead, a very long engagement between DOE and 1366 Technologies stopped short of the altar.
E&E News first wrote about 1366 Technologies in 2009, when the year-old company won a $4 million ARPA-E grant, and has tracked its progress periodically in other stories since then. (The company’s name is taken from the average solar energy reaching the Earth, in watts per square meter).
In a 2011 interview with E&E News, van Mierlo was candid about the unique promise and the challenges ahead of the silicon wafer production process conceived by co-founder Emanuel “Ely” Sachs of the Massachusetts Institute of Technology (Climatewire, Feb. 1, 2011).
With capital from the sale of a prior technology company, van Mierlo was looking for a high-impact clean energy investment in 2008 and settled on a daring solar venture. “It is really hard. It is not a zero-risk venture. We still have a steep hill to climb,” van Mierlo said in 2011. “We need a bit of luck,” he added. “But there’s certainly been a tremendous amount of progress here, so I’m feeling optimistic. You kind of have to be in my position.”

Level playing field

In the standard process, hair-thin wafers of highly purified silicon are sawed from square-sided ingots. The slicing, with diamond saw blades, turns half the income into dust, wasting it.

1366 Technologies’ breakthrough dispenses with sawing, conserving half the ingot that would otherwise be lost. Although key details are still shielded, it involves cooling and lifting a wafer-thin layer of silicon from a molten vat of the material, like picking up a newly frozen sheet of pond ice, and then transferring the solid wafer down an assembly line for trimming and quality checks. The process is repeated every 20 seconds, producing wafers with improved uniformity and quality, the company says.

“We simply freeze the top of the melt and pick off the wafer and just bypass a whole bunch of steps,” van Mierlo said in 2016, “just like you make float glass.”
DOE awarded the company a $150 million loan guarantee in 2011, adding to financing the company got from private venture firms, with the understanding that the guarantee would help underwrite a U.S. production plant, location to be determined.
Rather than go straight to manufacturing, however, the company’s executive chose an interim step — development of a full-sized production machine in a demonstration factory to conclusively show the process’s capabilities at commercial scale. DOE funds would not be drawn on for this proof of concept.
By then, DOE’s loan guarantee program was under sharp attack from congressional Republicans because of financial losses at solar manufacturer Solyndra, recipient of a $535 million guarantee. Solyndra went bankrupt in 2011.
Van Mierlo said like it or not, U.S. entrepreneurs are up against foreign rivals that don’t lack for government support.
If 1366 were to build its plant in Germany, Singapore, China or Taiwan, the government there would lay out a carpet of tax forgiveness, financing, construction support and other incentives, van Mierlo said, as the Solyndra controversy peaked in 2011.
“The people who say we shouldn’t be involved in this, they don’t understand how these decisions are being made” in other countries, van Mierlo said. “All I want is a level playing field for American manufacturing” (Climatewire, June 20, 2011).
The pilot factory machines proved their point.
“We are getting better all the time,” co-founder Sachs said in 2013. How? “I can’t share that exactly with you. That’s very sensitive information. I apologize for that. It’s very encouraging. It only has to get a little bit better to be fully automated production work” (Climatewire, Feb. 1, 2013).
Later in 2013, van Mierlo said the firm had achieved manufacturing rates of more than 1,200 wafers per day at the demonstration plant in Bedford, compared with a daily rate of 50 units in the laboratory. “The support from the [U.S.] government was crucial,” he added. “It makes it much more likely that it gets done here.”

Foreign suitors arrive

But foreign firms were interested in the technology too.
In 2013, the company announced $15 million in financing from backers led by strategic partner Tokuyama Corp., Japan’s largest wafer-quality silicon producer. That brought private investment in 1366 Technologies to $61 million.
In 2016, South Korea’s Hanwha Corp.’s global solar unit manufacturer, Hanwha Q Cells, contracted to buy 1366 Technologies’ wafers and advanced $10 million toward construction of the first production plant, planned for a new industry park south of Rochester in rural upstate New York. The project was also backed by five state and county organizations, including Empire State Development, New York’s statewide economic development agency.
Wacker Chemie AG, a global German firm, signed on to supply purified polysilicon for the process from its new Charleston, Tenn., plant, while promising to invest $15 million in 1366 Technologies’ production plant (Energywire, Oct. 21, 2016).
Van Mierlo had hoped to start work on the New York plant in 2016, but red tape slowed it down, he said. “We’re moving,” he said. “It’s certainly not moving as rapidly as one might hope.” The target became 2017. “It’s going to be a stretch — the end of the year rather than the beginning,” van Mierlo said. “We definitely want to be in construction next year.”
“We are in the process of getting ready for groundbreaking for the office park in the spring,” Shari Voorhees-Vincent, a spokeswoman for Empire State Development, said then. “At this point, we’re full-steam ahead.”
Less than three weeks later, Donald Trump had his astonishing presidential victory, bent on dismantling his predecessor’s clean energy agenda, and 1366 Technologies’ loan agreement was back in play.
In an interview last year, van Mierlo said the loan guarantee was critical to construction of the plant in New York. It would have 300 employees initially, growing soon to 1,000, according to the plan, with thousands more indirectly involved supplying silicon, building and powering the machines, transporting the products, and filling out the rest of the manufacturing supply chain.
“This technology is going to be a big part of solar manufacturing going forward and hopefully capture jobs in the U.S. That would be great,” van Mierlo said.
“Clearly, that will only happen if we successfully work with the new administration,” he said.
While negotiations continued, other foreign partners weren’t waiting. A year ago, Japan’s IHI Corp. began construction on a 500-kilowatt solar installation that will feature more than 120,000 wafers made with 1366’s direct-wafer process.
DOE wasn’t the only player, and the company’s other investors were losing patience, one source said. Finally, the clock ran out on the U.S. option.
Laureen Sanderson, 1366 Technologies’ spokesperson, told E&E News this weekend, “The loan program had several technical milestones, which we all exceeded in our Bedford demonstration factory.”
While the original guarantee agreement expired, DOE granted an option for renegotiation and renewal. Obama’s DOE turned the process over to the Trump DOE.
It took a long time, but the company executives finally met with Energy Secretary Rick Perry on Oct. 11 last year. There were many meetings with his staff, Sanderson said.
“Up to our decision to withdraw [this January], we were in good standing with the loan program and we had paid all of our fees in full. We made our last payment in December 2017.” The loan guarantee was never tapped.
Rep. Chris Collins (R-N.Y.), who represents the area where the plant was to be built, put the onus on 1366 Technologies for walking out of the plan.
“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.
“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,” Collins said.
But had DOE said yes in 2016 or 2017, delivering the loan guarantee, the wheels would be in motion to build the New York project, as van Mierlo described two years ago.
Sanderson said the firm hopes it can build some of its units in the U.S. one day. “We have always had several options available to us, but a U.S. factory — with the critical assistance of the loan guarantee — was always the priority,” she said. “We believe in the potential of U.S. manufacturing, and it remains part of our strategic plan with a more efficient financing structure.”
For now, the wedding tent is struck, the food and drink sent back, and the would-be bride and groom have parted.