There is a major problem that plagues photovoltaic solar panel production - its high cost. The first generation of panels were made using silicon. Silicon is an abundant material, but the refining of pure silicon is a very expensive process which consumes a lot of energy. These plants cost several hundred million dollars to build. Thin film, the second generation, which does not use silicon, is nevertheless prohibitively expensive to build. To solve that problem, a third generation of materials is nearing commercial application: the dye-sensitized solar cell (DSC), which simulates photosynthesis when exposed to light. While at least a year or two away from being put on the market, Israeli company 3GSolar is arguably one of the closest companies in the world to unlocking the secret of its success. DSC technology generates electricity when a dye coated on tiny particles of titanium oxide (cheap white pigment used in paints and plastics) interacts with light, 3GSolar senior physicist Michael Feigenson told The Jerusalem Post recently at the company's laboratory in Jerusalem's Har Hotzvim industrial park. The two major advantages of the technology are that it is half as expensive as silicon panels and that it can work in low light as well. 3GSolar is the first and only Israeli company working on the DSCs. However, there are also two significant technological hurdles that need to be overcome before the product can be sold. While the material may be cheaper, it is also less efficient at producing electricity, Feigenson said. "Our initial benchmark is 7-percent efficiency," Feigenson said. Because the company has just gone public, the current efficiency rating of its panels is considered classified information, and the company declined to reveal it. With a 7% efficiency rating, the company can begin to sell its modules. To compare, silicon panels are about 11%-15% efficient and thin film 6-11%, Feigenson said. VP Business Development Eytan Heller added that in China and Switzerland, efficiency levels of 11% for DSCs had been reached, but only under laboratory conditions. While the company declined to say how far along it was at the moment, Heller did say 3GSolar hoped to have its first working production line in 2010. It also plans to start a pilot project in India next year. The other current drawback, according to Feigenson, is the relatively short life span of the DSC. Because the cell is based on a liquid, it is not as stable as silicon or thin film. The initial goal is a seven-year life span, compared to 20 years for a silicon panel, he said. Future generations of the DSC would hopefully have longer life spans. The technology was first developed about 20 years ago by a Swiss scientist by the name of Michael Graetzel, and it is only now "leaving the lab on the path of commercialization," Heller said. He added that there were about 50 labs and companies working on the technology worldwide. "We are the leading company in robust DSC - applications for solar panels," Heller said. Wales-based company G24I has also made progress, but it is looking at the small electronics market. Right now, G24I is attempting to build a DSC that can be used to recharge a cellphone when the user is far from the grid. 3GSolar's marketing strategy focuses on the off-grid market in the developing world, estimated at some 1.6 billion people, Heller said. CEO Barry Breen noted that there was currently $2 billion worth of off-grid systems installed annually, "and the market is growing at 15% a year." Moreover, for the developing world, the lifetime of the product is not the major factor as it is in the developed world, Breen said. "In the developing world, the lifetime of the product is irrelevant. The cost factor is the one and only issue," he said. With more and more countries investigating the potential of solar energy for off-grid users, 3GSolar's phone has been ringing off the hook, Heller said. To reduce costs even more and to capitalize on the markets, 3GSolar intends to license its technology to local companies to manufacture and sell. Local companies, familiar with local markets, would rent the modules to residents for a monthly fee. The cells do not require expensive equipment to be manufactured, and much of the equipment is already available in plants around the world, Breen said. "I was in India not long ago at a solar PV factory which was at a standstill because of the lack of silicon. There they had the screen printers and bell furnaces we would need, just sitting idle. They begged to know when our technology would be operational," he said. The company is expecting the market to explode in the coming years for several reasons. "Over 30 African countries have just opened up their energy sectors to foreign help," Heller said, "and the World Bank is also involved in several large electrification programs." In Senegal, for example, the government divided the country into 10 zones and then contracted with different companies to provide electricity, Heller said. A first generation module of 32 cells would produce about 55 Watts. One such module can charge a 12 Volt battery, providing house lighting at night time. This may not seem like such a big deal, but minimal electricity can totally revolutionize a village economy. First of all, the work day would not end with the setting of the sun, meaning that people working at home on handicrafts could continue for several more hours. Second, solar energy can operate water pumps, which can extend the agricultural year far beyond the relatively few short months of rainfall, according to Heller. 3GSolar has announced it plans to list in Canada on the Toronto Stock Exchange (Venture). Sheldon Freedman, a partner at 21Ventures, which has invested in 3GSolar, said the public offering is a very big deal in Canada. If the going-public transaction is completed, it will be the first Israel business to list in Canada. "Canaccord Capital, Canada's largest independent investment dealer, is lead underwriter in the deal. They told me they are interested in being involved because they think it could potentially be worth half a billion dollars," he said. Freedman added that the Canadian stock exchange was positively salivating for Israeli companies. 21Ventures looks for companies with potentially exciting technologies and invests heavily in them from the seed stage on up. They also facilitate the research by arranging for scientists to visit other companies in the portfolio where they might be able to contribute their expertise. Both Heller and Freedman noted that there were more and more companies interested in producing the dyes, electrolytes and titania powder needed to make DSCs, indicating growing interest and potential. 3GSolar president and founder Jonathan Goldstein was one of the senior scientists at the Luz solar energy company, and Breen is an expert in thin film technology. The company has partnered with the Bar-Ilan Center for Advanced Materials and Nanotechnology, and Weizmann scientist Prof. David Cahen was heavily involved as an adviser, Freedman said. The company also has a working relationship with Solaronix, a Swiss firm affiliated with DSC inventor Graetzel. The company is also part of the FP7 European research cooperative. Each of the labs in the program is assigned a different research task in connection with dye solar cells, and then the information is shared at annual conferences. Feigenson has been charged with determining the Life Cycle Analysis (LCA). "It's not enough to just produce a product," he said. "We should look how the manufacturing, operation and recycling of the product affects the environment. Dye cells have less impact to the environment than silicon cells." To determine its LCA score, Feigenson looks at the product's carbon footprint and energy payback time. He has just submitted an article on the DSC's cycle, to be published in May. From pie in the sky 20 years ago, DSCs could very well be the next "disruptive" technology that revolutionizes the market, Freedman said.