Previously in this space we have focused on Magnolia Solar Corporation’s (OTCBB:MGLT) technology and how it can be applied in the commercial solar power sector. Rightfully so, since their thin film, anti-reflective coating has demonstrated the potential for increasing the efficiency of currently available solar cells like those offered by Canadian Solar Inc. (NASDAQ:CSIQ) and First Solar Inc. (NASDAQ:FSLR). The upside of this technology is considerable when viewed from this angle.
The company, however, is more diversified in its approach. Much of the research and development to this point has been done under the auspices of various government grants and contracts. Here we will review a bit of the company’s government-related history and talk about some of the potential future ramifications for Magnolia’s growth.
A couple of years ago the company was awarded a $1 million grant (followed by an additional $250,000) from the New York State Energy Research and Development Authority (NYSERDA), a state-funded agency committed to promoting energy efficiency through a wide variety of initiatives. This was a major development on two fronts. First, and most obviously, the funding was critical to continuing the development of the technology. Second, and perhaps most importantly, the grant was tied to a partnership with the College of Nanoscale Science and Engineering (CNSE) at the University of Albany.
Hear us out here, and please forgive the abundance of acronyms. The CNSE has a state-of-the-art research and development facility (E2TAC) in Albany that is committed to the advancement of nanotechnology. They also offer a business incubator program (iCLEAN) that gives select companies access to resources of all kinds, including the facility itself and the highly qualified staff. Rensselaer Polytechnic Institute (RPI) is just up the road and collaborates on the development teams. We don’t hear about Albany as a center of technology and innovation but that’s exactly what it is.
Just last year, the CNSE was announced as the center of a $400 million plus (including $57.5 million from the U.S. Department of Energy) initiative called the U.S. Photovoltaic Manufacturing Consortium. Reading the release will help you understand the breadth of the initiative, but the goal is to achieve solar power costs in the neighborhood of $1/watt. If this goal is achieved solar power would be much more competitive with other forms of power generation and we would likely see a proliferation of solar development. Magnolia Solar (MGLT) is co-located in Albany at Albany Nanotech and will benefit from this initiative as the company works with CNSE / Albany Nanotech in reaching the goal. Magnolia does not have to make a large capital investment to build a foundry as it will be able to take advantage of the impressive infrastructure in Albany.
Magnolia Solar benefits greatly from this whole arrangement. They work in a low cost, cutting edge research facility that keeps their overhead down. They get to work in conjunction with some of the brightest minds focused on nanotechnology and alternative energy. They also have access to consultants and services that will help them through the commercialization process, a key component for a science-driven company.
MGLT’s government-related history doesn’t stop there. They also have done business with the U.S. Air Force (USAF) and NASA. The company first announced an award from the USAF two years ago, followed quickly by a similar second award. Late last year the company announced a $750,000 Phase II award to further the same program. The goal of these efforts is to develop ultrahigh efficiency solar cells with efficiency better than 40 percent for defense applications. Magnolia also received funding last year from a NASA Phase I award of $100, 000 for development of high efficiency solar cells for space applications.
So the big picture looks like this to us. Magnolia Solar is developing thin film, flexible solar cells that have the potential to greatly increase the efficiency of current solar cells. For commercial applications alone, the upside is tremendous. Their technology also has applications in the defense and space exploration markets, both of which have incredible potential. The company is benefitting in many ways from their involvement with the Albany NanoTech Complex, including access to high tech facilities and people. What’s not to like?
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