If you believe Frank van Mierlo, CEO of 1366 Technologies, one reason his company survived when so many other solar startups have tanked in recent years is sitting in the middle of the company’s meeting room. “We got this for $200,” he says, pointing to a neatly constructed but obviously homemade conference table. “My son made it.”

His company’s parsimonious culture might’ve helped it outlast more spendthrift companies like Solyndra, but van Mierlo admits that 1366 was also lucky. The venture-capital-driven clean-energy spending spree that started in 2006 resulted mostly in bad news—bankruptcies, acquisitions for pennies on the dollar, and money-losing IPOs—when silicon became so cheap that more expensive new materials and thin-film technologies quickly became unviable. 1366 was fortunate that its technology didn’t compete directly with low-cost silicon solar cells, and it was still working on it when the bottom fell out of the solar market. A sharp drop in solar prices raised the bar for new technologies, demanding even lower costs or higher performance.

“Other companies scaled just in time to see the prices collapse by a factor of five,” van Mierlo says. “They built the wrong factory for the wrong era, and became roadkill.”

1366 was in a position to keep working on its technology until it could compete, without the financial liability of a large new factory. And now, as the solar market shows signs of recovering, the company hopes the time is right to start selling a new, cheaper kind of silicon wafer to makers of solar cells.

Even if 1366 is successful, it won’t necessarily open the floodgates to new funding for innovative solar companies. Matthew Nordan, a vice president at the venture capital firm Venrock, says for venture capitalists to start betting heavily on solar startups again would require a wildly profitable IPO from 1366—and a few more similar success stories. But success for 1366 could encourage clean energy investors to give new technologies a closer look.

The company still faces major challenges. It needs to invest in manufacturing shrewdly, increase production rates by about four times to bring down costs per wafer, and will have to fend off competition from a new generation of leaner solar startups.

But the early signs are promising. 1366 raised $15 million this month to bring total investments to $100 million (including government grants), on the promise that its technology could cut the cost of the silicon wafers—the most expensive part of silicon solar cells—in half. Doing that is one of several efforts within the solar industry aimed at making solar competitive with fossil fuels (see “Praying for an Energy Miracle”).

The company’s technology produces thin wafers of silicon—the material used in most solar cells to convert sunlight to electricity—more efficiently. Conventionally, wafers are made by first forming large blocks of crystalline silicon, and then cutting them up with diamond-coated wire saws. As much as half of the original silicon is wasted as the saws grind it up into dust. 1366 makes wafers in a single step directly from molten silicon. Van Mierlo says the equipment for the process also costs a third as much as conventional equipment. But as recently as 2009, all the company had to show for it was a small, four-centimeter wafer. The industry standard size is 15 centimeters. It’s planning to build its first factory next year, when, according to some analysts, the current glut of solar panels could come to an end (see “1366 Technologies Tries to Break the Solyndra Curse”). Now 1366 has demonstrated that it can make over 1,000 full-sized wafers a day on its equipment, a milestone that triggered the most recent funding.

Carmichael Roberts, a founding investor in 1366 from North Bridge Venture Partners, says that even though the technology is basically proven, the company still has to worry about practical issues like getting the size of the first plant right. If the plant is too big for initial demand, the company will end up with a lot of wasted capacity that will make it harder to recoup its investment. If it builds too small, 1366 might not achieve the necessary economies of scale. In its favor, the company has a partnership with a large silicon producer in Japan, which should give it access to cheap supplies of silicon.

1366 will also face fresh competition. Conventional wafer makers are finding new ways to recycle wasted silicon and reduce waste in the first place. At the same time, other companies are developing new wafer manufacturing technologies that have other advantages besides reducing waste—they can make wafers significantly thinner, for example, which could help improve solar panel efficiency.

1366 plans to reduce the cost of silicon wafers from roughly 20 cents per watt to about 8 cents per watt. That 12 cent savings could be an important part of the bigger effort to reduce the total cost of solar panels from about 80 cents per watt now to 50 cents a watt or lower, where solar power could compete with fossil fuels.

Standing next to his cut-price conference table, van Mierlo seems hopeful his company’s luck will continue: “The timing could be perfect,” he says.