Thin-filmsolardeveloper Miasolé has dropped out of a government funding program that would have given the company up to $20 million for research and development, according to Scott Stephens, a government contractor who spoke on behalf of the U.S. Department of Energy on Tuesday.

"Miasolé decided it wasn't aligned with what they wanted to do as a company," said Stephens, who helps oversee the DOE solar-research program Technology Pathway Partnership and also is a senior engineer with the consulting group Sentech.

Last year, the DOE announced it had selected Miasolé, along with 12 others, to receive a up to $168 million for technology development. Miasolé was expected to use its funding, which was to be dispensed over three years, to develop flexible thin-film modules with integrated electronics and to advance solar installation technologies.

After Dow Chemical earlier this week announced it was replacing Miasolé with competitor Global Solar as its partner on another DOE project, CNET reported that the Miasolé grant isn't being renewed. Rumors abounded that the DOE had dropped Miasole from the program.

But Stephens said those rumors simply aren't true. The DOE and Miasolé were still hashing out what is called the "statement of project objectives" late last year when the solar company decided to walk away, he said.

Stephens said there is no bad blood between the two, and that Miasolé was entitled to back away during the negotiation period.

And Miasolé CEO Joseph Laia said the company also backed away from the Dow Chemical deal, instead of the other way around.

That's because both deals, which were submitted to the DOE before he started at the company in September, required Miasolé to develop flexible building-integrated photovoltaic technology.

Laia said integrating this type of thin-film solar into building materials is difficult because it is particularly exposed to the elements and requires a special membrane to keep water from getting into the cells.

The problem is that the barrier isn’t available today, and probably won’t be economical for another two years, he said.

Laia said he decided to turn down the DOE projects because he wanted to keep the company focused on improving cell efficiency and manufacturing its current technology.

Speculation about technology problems at Miasolé have run rampant since the startup laid off about 40 employees in December (see Former Employees Confirm Cuts and Layoffs Raise Questions About Technology).

At the time, Paul Maycock, president of the solar-electric consulting and research firm Photovoltaic Energy Systems, said the layoffs were a sign that company had run into technical difficulties. “It’s very difficult to make thin film,” he said in December.

But Laia said the company isn’t having any more technological problems than everyone else. The company is working to increase the efficiency with its thin-film cells that convert sunlight into electricity and is tightening up the manufacturing process to reduce excess waste.

Laia said Miasolé is producing panels with 9 to 10 percent efficiency. "But you don't have to take my word," he said. The National Renewable Energy Laboratory is verifying Miasolé’s conversion rate and Laia said he hopes to receive the lab’s results in the next three weeks.

The company's competitor, Global Solar, has reached an average efficiency of 10 percent for its cells (it’s not making panels). Silicon-based crystalline cells often have efficiencies of 12 to 15 percent.