The Company That’s Turning Bill Nye into The Solar Guy

Joel Anderson  |

Sometimes, the boldest, most important technological advances are the ones that facilitate something we already have at our disposal. The name of the “inventor” of the automobile is not a name most Americans can remember, but Henry Ford, whose development of the assembly line made the car affordable enough that most Americans could afford one, is one of the better-known names in American history.

It’s a similar reality to what’s playing out in the solar industry right now. The growth in installations, from residential rooftops to massive utility-scale plants in the California desert, is enormous, and has been growing at breakneck speed for over a decade. But while solar panels continue to improve efficiency, the basic technology hasn’t really changed that much. What really turned the tide, making solar something middle-class homeowners would consider putting on their roofs, was plummeting costs.

However, when you have an idea that can do both, something that both lowers costs and improves a product, well then you’ve really hit on something. And that’s precisely what has the investors in Rayton Solar so excited. The company is developing a process that should allow them to simultaneously improve efficiency, massively cut costs, and even develop new applications for solar cell technology. And it’s doing this while also turning to new methods of capital raising that are proving almost as revolutionary as their technology could become.

Cheaper Panels with Less Material

When you begin to delve into the process that Rayton Solar’s founder and CEO Andrew Yakub first developed while working in a laboratory for the UCLA Department of Physics, it can begin to sound unnecessarily complicated. The basic premise is this: instead of cutting the thin silicon wafers necessary for making solar cells with conventional methods (i.e. a fancy saw), they use a process called ion implantation, in which they fire a layer of protons into the silicon at a precise depth and then use heat to chip off an incredibly thin wafer.

At first blush, that doesn’t sound like a huge improvement. In fact, more often than not, the transition from a saw to a particle accelerator is going to make things more expensive. However, in this case, there’s a lot more at play.

Cutting off silicon wafers in the traditional fashion ends up wasting a lot of silicon in the form of dust. It also limits how thin the wafer can be cut. The method Yakub developed and patented can cut wafers a mere 3 microns thick, compared to 200 microns for more common methods, and do so without losing any of the valuable pure silicon to waste dust in the process. All told, it means the ability to make solar cells using 50-100 times less silicon, something that would allow Rayton to make panels 60% cheaper than current manufacturing options.

The Holy Grail of Wide-scale Manufacturing

It doesn’t stop there, though. The thing is, there’s more than one way to make silicon.

“The thinness allows us to use float zone silicon,” says Yakub. “Solar grade is Czochralski Process silicone. That is about $30 a kilogram. That price has been dropping rapidly because of the solar industry, but what has not been dropping rapidly has been float zone monosilicon, which uses a different way to make it with a lot less impurities, but costs between $200 to $400 per kilogram right now. It’s electronic grade silicon – the stuff in your cell phones and laptops.”

Float zone silicon, with its enhanced absorption capabilities and lower levels of impurities, makes for superior, more-efficient solar panels. It’s just been cost-prohibitive when you’re talking about sawing off 200-micron wafers and leaving the majority of your ingot behind in the form of dust. Paying about 10 times as much for silicon to get a boost in efficiency starts looking pretty good, though, when you’re using 100 times less of it to make a solar panel. That means Rayton may have unlocked the holy win-win of manufacturing: cheaper AND better.

Getting Past the Solyndra Problem

Of course, once you start talking about any budding young solar company, you inevitably start running up against a name that’s the scourge of American solar companies: Solyndra.

“We started out right after Solyndra,” said Yakub. “That one company destroyed the entire solar industry. There were no solar startups at the time. You couldn’t be a solar startup.”

And, in Rayton’s case, the comparison was actually founded in a little more than the general anti-solar hysteria of the time. Solyndra’s failing came in sinking a lot of money into developing a solar panel that wouldn’t use silicon at a time when the price of silicon was very high, only to see the price of silicon subsequently plunge.

What’s to stop Rayton from suffering a similar fate, given that its value is tied up to some degree in the price of float zone silicon? Well for starters, production of float zone silicon would need to expand a lot to really decrease prices, something that would require a major shift in market forces and require years if not decades. Secondly, while the benefits of improving the efficiency of silicon use would be reduced by cheaper silicon, it’s not as though the benefits of using 1% of the materials required by traditional means is going to get completely erased no matter how far prices fall.

But one other major benefit of making solar cells with such incredibly thin wafers comes in the form of its flexibility. And flexibility is key.

“Flexible, lightweight, high efficiency solar is an emerging market,” says Yakub. “Now that the prices of silicon have dropped so much, the biggest chunk of costs is in the installation, the racking, and the glass. If you go flexible, you can eliminate the racking and the glass and significantly reduce the installation labor. There are companies on the market that are selling thin, flexible gallium arsenide solar cells for $100 a watt, and they're making money because there's a lot of niche applications for lightweight, portable solar with emerging technologies like drones . We are trying to unlock those capabilities for silicon specifically. It’s not toxic to the environment like the competing semiconductors, and it’s the one semiconductor following Moore's law. That is us hedging our bet.”

Making flexible solar cells with silicon could allow Rayton to do it at a fraction of the current price, unlocking a whole new host of potential applications for their technology.

Rayton Joins Forces with a Rockstar (of Science)

Rayton’s story goes beyond simply offering a chance to make superior-quality solar cells at a fraction of the cost, as one of the early companies turning to Reg A+, the company is also delving into an exciting new space in the way it’s approaching capital formation as well.

In many ways, Rayton represents pretty much a picture-perfect example of how a new generation of companies may be able to raise money from the public to bring their product to the market. When it comes to launching their crowdfunding campaign, Rayton has a lot of features that should help it when it comes to appealing to the broader public. They have a patent for technology that could prove disruptive. They’re building something that’s environmentally friendly and appeals to people with a social impact approach to investing. They’re working in the solar industry, which is enjoying a certain renaissance of public opinion.

But all of that pales in comparison to one thing: they’ve got Bill Nye.

“I knew that we had to find some sort of way to reach a lot of people to go viral online and to get some sort of endorsement of somebody who is well known, some sort of person that would help get the word out,” says Yakub.

Fortunately for Rayton Solar, their technology’s innovative approach was just what they needed to get Nye involved.

“I approached Bill Nye’s agent and called him up and told him about our company, what we're doing, and then Bill came,” Yakub says. “He highly scrutinized us. I had a three-hour meeting with him. We went through, in detail, the science behind it. By the end of the meeting he just kept saying: ‘This is so cool.’ That was it.”

Solar, Social Media and Celebrity

Any decent social media consultant will tell you that associating your brand with an influencer is absolutely essential, and with crowdfunding, it’s no different.

“What we realized in equity crowdfunding is that you are selling a product,” says Yakub. “You have your main product, but you have to now sell your securities as a product. What is the best way to do that? Companies have been doing it for years and years. It’s not a new thing. It’s celebrity endorsement of your product. But you also need somebody with strong social media following for this process. Crowdfunding is all through social media.”

But, in Bill Nye’s case, Yakub and Rayton Solar were getting more than just a recognizable social media brand that could attract attention, they were getting maybe the single strongest mouthpiece out there for communicating how potentially disruptive their technology truly could be.

“He’s a scientist as well as an educator,” says Yakub. “He has a really unique way of describing things that everybody just kind of understands. We have a very highly complex, scientific process, it’s not straightforward to grasp especially for the average consumer out there. That was our idea of getting Bill Nye is that he can explain it. He can explain anything to anybody. “

“I probably would not have done it if we were not able to get Bill Nye,” Yakub concludes.

The Cold Calculus of Crowdfunding Campaigns

It might be frustrating to some to hear that a company with a potential cutting-edge technology that could help rapidly expand global solar capacity and help avert global warming felt that the former host of a children’s television show was so essential to their process, but it’s also a reflection of what investing in the age of crowdfunding has started to look like.

“We’re going through a registration process right now,” says Yakub. “I’m pretty confident we'll make our goal. A lot of it is because of the Bill Nye campaign.”

And for a budding young company, using a crowdfunding campaign can have a lot of advantages over some of the more traditional routes to financing.

“We could have gone to investment bankers that were ready to help us,” says Yakub “Those investment bankers take a $150,000 retainer. That is about the market average. This is actually less than the money we spent on our crowdfunding campaign. But with the investment bankers, you have a lot less control, and at the end of the day, when they do the raise for you, they will end up owning more of your company and it will cost you a lot more than the crowdfunding campaign.”

Taking Solar to the Consumer

So where is Rayton Solar heading from here? First is completing their crowdfunding round and raising $7 million. From there, the plan is to prove that their technology is scalable enough to appeal to the industry’s major players.

“The goal right now is to build a pilot test line, make the technology work commercially,” says Yakub. “Show that it can be repeated. Then once we're there, we have a lot of options available. We can license it. We can sell the machinery. We can just sell the technology to a larger company like Solar City (SCTY) or Tesla (TSLA). Or we can go into actual manufacturing of cells or manufacture the modules. We have a lot of options there. We will just deal with it depending on what the market climate is at the time.”

All told, though, the company has a lot more options for expansion than it would have pre-JOBS Act. Rayton Solar can stay focused on what the best path is without feeling rushed towards an eventual IPO.

“Now that Regulation A is available it gives a lot of flexibility because a company can raise up to $50 million a year,” says Yakub “For most startups you can stay private and grow for a very long time.”

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

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Symbol Name Price Change % Volume
TSLA Tesla Inc. 252.38 -1.12 -0.44 8,148,989 Trade
SCTY SolarCity Corporation n/a n/a n/a 0 Trade

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