Dow Chemical is moving full speed ahead to develop roof shingles embedded with photovoltaic cells. To facilitate the move, the U.S. Department of Energy has backed Dow’s efforts with a $17.8 million tax credit that will help the company launch an initial market test of the product later this year.

In October 2009, the chemical giant unveiled its product, which can be nailed to a roof like ordinary shingles by roofers without the help of specially trained solar installers or electricians. The solar shingles will cost 30 to 40 percent less than other solar-embedded building materials and 10 percent less than the combined costs of conventional roofing materials and rack-mounted solar panels, according to company officials.

Dow isn’t the first company to incorporate solar cells into building materials. In recent years, a number of leading solar manufacturers have launched small lines of solar shingles, tiles, and window glazes. But as Dow looks to bring its shingles mainstream, other solar manufacturers are backing away from the products. Suntech Power, the Chinese solar maker, and the largest crystalline silicon photovoltaic manufacturer in the world, has several integrated solar systems on the market, but with the recent downturn in new housing construction, the company has focused instead on ramping up conventional photovoltaic panel output, says Jeffrey Shubert, Suntech Power marketing director for North and South America.

According to analyst Johanna Schmidtke of Boston-based Lux Research, building integrated solar installations are, despite manufacturers’ claims, still significantly more expensive than conventional rack-mounted solar arrays due to increased costs associated with manufacturing and installation. The devices currently occupy niche markets for those willing to pay a premium for the aesthetic value of the less-obtrusive integrated systems.

Companies looking to develop solar shingles and other solar-integrated building materials have also had to overcome significant design and materials challenges. “Putting solar panels directly into the roof or skin of a building requires a product that has structural integrity, weathering ability, and electrical integrity,” says Mark Farber a senior consultant with Photon Consulting in Boston. “It has to be a good building material and a good power generator, and achieving both is hard to do.”

To address cost and performance challenges, Dow partnered with solar cell producer Global Solar Energy, one of the early developers of copper, indium, gallium, and selenium (CIGS) thin films. CIGS thin-film semiconductors are less expensive than conventional crystalline silicon solar panels and offer some of the highest conversion efficiencies of emerging thin films.

For each of Dow’s shingles, Global Solar will manufacture strings of five interconnected solar cells. Dow will then encapsulate each string with glass and polymers and embed it into a shingle with electrical plugs at each end that link the individual shingle into a larger array.

Dow is leveraging its ties within the building materials and construction industries to develop, test, and distribute its shingles. Installations can be completed in half the time of conventional solar installations, and an electrician is only needed to make the final connection to the building’s electrical system, according to David Parrillo, senior research and development director of Dow Solar Solutions.

The DOE also awarded United Solar Ovonic of Rochester Hills, MI, $13.3 million in tax credits to ramp up production and increase the efficiency of its building integrated photovoltaic materials. Unlike Dow, the company produces amorphous silicon thin films that are encapsulated entirely in polymers. Amorphous silicon offers lower efficiencies–currently 6.5 to 7 percent at the array level–than the CIGS shingles that Dow is developing. Silicon, however, is a less expensive material than CIGS and is less susceptible to moisture. As a result, the integrated solar cells built by United Solar Ovonic don’t require glass covers like Dow’s shingles, allowing them greater flexibility.