Focus enough sunlight on a sheet of paper and you can light a fire. Focus the same sunlight on a solar cell and you can generate plenty of electricity. That strategy for increasing the efficiency of solar power is, as Palo Alto, CA-based startup SolFocus demonstrated last week, one of the hottest trends in alternative energy. SolFocus, which has secured $25 million in venture capital financing to accelerate development of its concentrator photovoltaics, employs mirrors to focus sunlight 500-fold onto high-efficiency solar cells.

Concentrator technology to increase the output of solar power is not new. But thanks to high-efficiency photovoltaics and novel manufacturing techniques that create better solar cells, lenses, and mirrors, concentrator photovoltaics systems are delivering more power at lower cost.

At the same time, double-digit growth in demand for solar power systems is outstripping the ability of manufacturers to keep pace, given a tight supply of silicon for conventional solar cells and the high cost of the equipment needed to produce them (see “Large-Scale, Cheap Solar Electricity”).

The technology has the potential to lower costs because it uses a fraction of the semiconducting materials that convert light into power in photovoltaics. Most of the cost is in the lenses or mirrors to focus the light and tracking equipment to keep the device pointed at the sun – elements that are more susceptible to economies of scale than silicon production. “Coming from the semiconductor industry, I knew we could never scale up the amount of silicon we’d need to make a material dent in world energy demand,” says cofounder and CEO Gary Conley.

SolFocus’ design, for example, uses one-thousandth as much semiconductor material per watt produced as a conventional silicon photovoltaic cell. The technology uses compound photovoltaics such as germanium and gallium arsenide, originally designed for use in satellites, which can capture up to 40 percent of the solar energy hitting them – more than double the efficiency of high-end silicon cells.

But the bulk of the materials reduction comes from the concentrator, which Conley says resembles the headlight in most modern cars. “Put the cell where the light bulb is and you have our design,” says Conley. Mirrors are the key: a primary mirror that focuses sunlight onto a smaller mirror perched above, which, in turn, focuses the light on the solar cell.

SolFocus’ current, first-generation design molds an array of 635-square-centimeter mirrors into a glass plate. Secondary mirrors attached above them reflect light through holes in the plate onto one-centimeter-square high-efficiency cells below.

A second-generation design squeezes the process into a single glass block: light beaming through the top of the block reflects off primary mirrors shaped into the bottom face, up to secondary mirrors shaped into the top face, and back to one-millimeter-square photovoltaic cells popped into the center of the primary mirrors.

Whereas silicon solar panels today cost close to $3 per watt to produce, Conley says SolFocus will manufacture solar systems at $2 per watt when it opens its first concentrator plant next year; and he says gigawatt-scale production will cut the cost per watt to just 50 cents. The second generation should cut costs further, says Conley, to as low as 32 cents per watt.

Despite these optimistic claims, though, SolFocus will have plenty of competition. Robert McConnell at the U.S. Department of Energy, and an expert on concentrated photovoltaics, says SolFocus must not only prove its technology but also outperform a growing field of competitors. “They’ve got at least three dozen competitors, including companies that have many more years of development,” says McConnell.

Indeed, SolFocus’s toughest competition could come from the world’s largest photovoltaic manufacturer, Japan-based Sharp, which has developed a concentrator using Fresnel lenses – the same basic technology used to amplify the signal beam in lighthouses. Sharp’s system employs an array of such lenses in a single block of relatively cheap injection-molded plastic.

The DOE’s McConnell says the most critical test for concentrators will be durability. In concentrator photovoltaic’s first period of development in the 1970s and 1980s the technology suffered from a series of disasters, akin to the flying blades and broken gearboxes that bedeviled wind power’s pioneers. Sulfur in the air eroded mirrors. Hail and wind smashed delicate lenses. Dust jammed the tracking devices needed to keep the systems targeted on the sun. And in the worst cases damaged systems posed serious fire hazards.

SolFocus’ self-contained devices should be less susceptible to damage and safer than their predecessors, claims Conley. Nevertheless, they’re targeting large field-based solar power plants for their first rollouts, and leaving the more lucrative commercial rooftop market for later on.