In order to stimulate demand and development for renewable energy sources, Intel is entering the solar cell industry by spinning off key assets of a start-up business effort inside its new business initiatives group to form an independent company, SpectraWatt.

As part of this, Intel's investment organisation, Intel Capital, is leading a $50 million investment round in SpectraWatt and is joined by Cogentrix Energy LLC, a wholly owned subsidiary of The Goldman Sachs Group, PCG Clean Energy and Technology Fund and Solon AG.

Intel explained that SpectraWatt will focus on advanced solar cell technologies and will manufacture photovoltaic cells for solar module makers. The company will also concentrate development efforts on improvements in current manufacturing processes and capabilities to reduce the cost of photovoltaic energy generation.

SpectraWatt is expected to break ground on its manufacturing and advanced technology development facility in Oregon in the second half of this year with first product shipments expected by mid-2009.

Intel reminded that solar cells are the discrete components in a solar energy generation system responsible for converting sunlight to electricity, with the end-user market segment for solar technology in 2007 totaling approximately $30 billion, a 50% increase from 2006, according to Photon Consulting.

The solar industry is expected to grow 30 to 40% annually as the economics of solar, which is currently approximately twice the cost of delivered retail electricity on a per kilowatt basis, begins to approach that of traditional electricity-generation technologies.

Further, Intel noted that the development of a small solar business within the company is consistent with its philosophy to protect the environment as well as seek new business opportunities.

Intel reminded it is on track to reduce its total worldwide greenhouse gas emissions by 30% from 2004 levels through 2010, and also recently introduced lead- and halogen-free microprocessors.

Arvind Sodhani, president of Intel Capital and Intel executive VP commented in a statement regarding the spin-off, "SpectraWatt is a great example of technology resulting from entrepreneurial efforts inside Intel. This is an important investment for Intel Capital in the growing cleantech sector and we look forward to working with the company to support its expansion."

The transaction is expected to close in Q2.

By Ann Steffora Mutschler, Senior Editor - Electronic News

See also: The Electronics Weekly focus on solar cells, presenting a roundup of content related to photovoltaic technologies, converting light sources to energy.