A start-up called Stion will receive $1 million from the National Renewable Energy Laboratory (NREL) to develop a new type of low-cost, high-efficiency solar panel. The company will use the new funding to make solar panels that combine two types of solar cells, which will allow the panels to efficiently convert a wide range of the solar spectrum into electricity.

Stion already makes thin-film solar panels, a type of solar panel that is generally less efficient than conventional, crystalline silicon solar panels, but that can cost much less to manufacture—in some cases half as much. The new panels are meant to be just as efficient as conventional silicon ones, but still significantly cheaper to manufacture. The funding is part of the Obama administration's recently announced Sun Shot initiative, which has the goal of reducing the cost of installed solar panels by 75 percent, to make solar power competitive with fossil fuels.

Stion's existing panels convert 12 percent of the energy in sunlight into electricity. This is a high figure for thin-film solar panels, which typically have efficiencies that range from 6 to 11 percent. The new panels use a tandem-solar-cell design to increase efficiencies to 15 to 18 percent, says founder and chief technology officer Howard Lee.

Lee won't say exactly what it costs Stion to make its first-generation solar panels, but he says the company is now "close to being competitive" with First Solar, the world's biggest thin-film solar-panel maker. First Solar's low costs and relatively high efficiencies have made it the only thin-film manufacturer to rival the production capacity of the largest conventional solar-panel makers. (The panels are cheaper than conventional silicon panels, but less efficient.)

First Solar makes cadmium-telluride thin-film solar panels, while Stion makes a type of solar panel made of copper, indium, gallium, and selenium (CIGS). This material is just starting to be commercialized, and many experts believe it can achieve higher efficiencies than cadmium-telluride solar cells.

But two things set Stion's technology apart from other CIGS solar panel manufacturers. First, it doesn't require specialized manufacturing equipment—instead it uses conventional sputtering equipment that is used now to make thin films for semiconductor chips and hard drives.

Lee says that will make it easy for it to expand its manufacturing worldwide. "You can use equipment that you can buy off the shelf," he says.