News of Solyndra's demise has been greatly exaggerated, CEO Brian Harrison would like to tell you.

The company -- which last night said it will close its first factory, lay off some employees and reduce anticipated output to 300 from 600 megawatts by 2013 -- can produce solar cells for rooftop systems that themselves are competitive in terms of price with more conventional solar arrays, Harrison said in an interview with Greentech Media. Solyndra's modules cost more than conventional solar panels to make, but that delta gets eroded through cheaper installation procedures.

A rooftop system based on Solyndra's modules and racks might today sell for around $4 a watt, depending on the roof, he said.

By the end of 2011, the "all-in" price for a Solyndra system, including modules, racking and installation, should be around $3.50, he added.

"Our costs [for manufacturing the module] will be below $2 by the end of 2011," he said. At the time, Solyndra will sell the modules, potentially, for around $2 to $2.35 per watt, while the balance of system might run $1.10 to $1.35 per watt.

At those prices, Solyndra will be a cash-positive company, Harrison added.

By the end of 2012 or the first quarter of 2013, Solyndra-based systems could sell for around $2 a watt, with the manufacturing cost for modules declining to $1.30 a watt.

Keep your eyes on those numbers. Actually, we trust that you will. The company -- which makes copper indium gallium selenide (CIGS) solar cells shaped like tubes -- remains one of the most controversial players in solar. The tubular-shaped modules allow Solyndra systems to harvest energy during the early morning and later evening hours, effectively boosting the power production compared to conventional, planar modules. The IRS has also ruled that building owners can get tax credits for replacing their roof with a reflective roof if they are installing a Solyndra system, a tax nuance that curbs the cost of retrofits and makes the modules more attractive. It's something of a corner case, but third-party developers say it helps defray the cost of roofing. So far, only Solyndra can take advantage of the IRS ruling, although others such as Sanyo may try.

Solyndra modules are exclusively targeted rooftop installations, but that also fits into a growing trend in the industry, says Harrison. Utilities and others are increasingly trying to put solar installations on that fallow real estate above your head rather than trying to find plots of land in the desert with decent grid connections and few endangered reptiles.

"Southern California Edison has shown you can get into utility scale -- 15 to 20 megawatts -- by ganging together a number of roofs," he said. Roofs were considered until recently a dormant asset by REITs. Now they want to monetize that space. The commercial rooftop market for solar comes to around 4 gigawatts now and will grow to 11 to 12 gigawatts by 2013.

"It is not a niche by any means. It is a growing segment," Harrison said.

The company has also landed a number of contracts. In the third quarter alone, Solyndra modules were used in seven 1-megawatt or larger solar installations, he said. In the fourth quarter, look for a 3.7-megawatt deal. Coca-Cola, Anheuser-Busch and Frito-Lay are all customers.

"We've been too quiet," he said. "We're going on a number of brand-name buildings."

The problems? Tubular modules aren't easy to produce. The cost of silicon solar panels has plummeted over the past two years thanks to declining prices for silicon and competition from Chinese manufacturers and First Solar. First Solar now says it can make cadmium telluride solar modules for 76 cents a watt, not including installation. Solyndra historically has had to grapple with high costs. In the amended S-1 filed earlier this year with the SEC in anticipation of a now-cancelled IPO, Solyndra said that its solar modules sold for $3.24 a watt and that they cost even more to make. The price has since come down, Harrison said, making the S-1 information out-of-date. (The initial S-1 was filed in 2009. The amendment came this past April.)

"Those prices are competitive, but I don't know how he can say that when they have a new production process in Fab 2," said Shyam Mehta, Senior Analyst at GTM Research. "If the process benefits are so much greater in Fab 2, why not just retool Fab 1 [the facility that will be closed], rather than shut it down?" he asked.

Mehta also noted that the rate of decline in prices for solar modules has actually slowed down from when Solyndra first posted its S-1 in late 2009.

The company has also faced internal challenges. Harrison came in and replaced founding CEO Chris Gronet this summer. Solyndra has raised over $1 billion from private investors and landed a $535 million loan guarantee from the U.S. government. Still, despite the sterling financial backing, the company had to cancel a proposed IPO, and critics abound.

Slashing the price as outlined would be key to a rebound. How will it be accomplished? Volume manufacturing and improvements in factory yields and module efficiency, Harrison said. Fab 1, the factory Solyndra said it would shut down, is not as efficient as Fab 2, the mega-factory erected in Fremont, California.

"We're getting lots of momentum," he said.

Class, please discuss.

Tags: cigs, cost per watt, first solar, nanosolar, solar energy, solopower, solyndra, thin film solar