Ascent Solar Technologies (NSDAQ: ASTI) said it has begun producing solar panels that are made by depositing copper, indium, gallium and selenium on a flexible sheet of plastic, a substrate switch that the company says could save it time and money.

The Littleton, Colo.-based company's just-inaugurated pilot line can produce 1.5 megawatts of panels per year. Ascent Solar is outfitting a 30-megawatt factory in Thornton, which is north of Denver, and it expects to start production there during the first quarter of 2010.

The start of the pilot production represents a milestone for a company that was spun off by technology incubator ITN Energy Systems and went public in 2006. The company has faced delays: It had aimed to begin pilot production in 2008 and start manufacturing at the new factory in 2009.

To keep the lights on, Ascent Solar has been generating revenues by carrying out research and development contracts with government agencies such as the U.S. Air Force Research Laboratory and NASA.

Employing a plastic substrate, ideally, will cut costs. Most other CIGS companies are putting their solar cells on glass or metal foil substrates, which cost more and, in the case of glass, cost more to ship.

Plastic also lets Ascent combine the making of solar cells and panels into one process, said Brian Blackman, director of investor relations at Ascent Solar. (Blackman, though, declined to disclose the production costs.)

With plastic, laser equipment can be used to connect the solar cells, which in turn allows Ascent Solar to customize the voltage and current output, he added. This interconnect work is typically performed in a separate process when metal is used as a substrate.

Companies that are using various types of metal substrates include Nanosolar, Global Solar and Miasolé. Companies working on glass include Johanna Solar, Honda Soltec, DayStar Technologies and Solyndra. Flison and Solarion, meanwhile, are developing CIGS films on plastic.

Metal could introduce impurities into the CIGS materials while plastic has a smoother surface and is inert, said Eric Wesoff, a GTM Research senior analyst who produced a report on CIGS companies last month.

But plastic needs to be able to withstand high temperatures during production – and while under the sun, Wesoff said. Ascent Solar said the plastic it has developed is tough enough to survive the manufacturing process. Blackman said the company is still in the early stages of commercializing its panels, so it's not ready to offer warranties for its products yet. The goal is to offer warranties of 20 years or more that are typical from established companies.

Like some of its competitors, Ascent Solar is targeting what's called the "building integrated photovoltaic" market, in which solar energy equipment is built into components used for constructing a building. The market faces both technical and cost challenges, and companies in the building industry have just begun to explore whether they can make good money from adding solar energy equipment into their products.

There is a dispute now running about how integrated the solar panels would have to be. Is it good enough to attach an ultra-thin film to a rooftop membrane after both products have left the factories, or does it have to be added to roofing or other building materials during the process of making those building materials?

"The BIPV market has a potential of being maintech instead of greentech. An architect can say I want a south-facing wall to be photovoltaic, and it's part of the standard building material," Wesoff said.

Ascent Solar wants to sell its thin-film panels to building material companies that would integrate the panels into their roofing membranes or other products, Blackman said. The company said its panels would also be a good fit for outfitting satellites and consumer electronics.

The company has a product development agreement with Spain-based Texsa and France-based Icopal, both of which make roofing materials. Ascent Solar also has a similar agreement with TurtleEnergy in Linden, N.J., which designs and installs solar energy systems. Panels from the pilot line will go to these partners, who will test and determine whether they can develop products using Ascent Solar's offerings.

Norway-based Norsk Hydro, which makes aluminum-building components, is a key shareholder in Ascent Solar. Norsk increased its stake in Ascent Solar to 35 percent last year. 

Ascent Solar said its panels from the 1.5-megawatt pilot line could convert more than 9.5 percent of the sunlight into electricity. The National Renewable Energy Laboratory, which is run by the U.S. Department of Energy, has verified that the panels could achieve as much as 9.64 percent efficiency.

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