A Solar Junction wafer of high-efficiency solar cells. Each individual chip can produce about 20 watts.

Solar Junction's solar cell is like a tiny layer cake able to crank out more power per inch than most cells.

The 4-year-old company yesterday said it expects to start production of its high-efficiency solar cells by early next year in its home town of San Jose, Calif. It is also awaiting word in the next few months on an $80 million loan from the Department of Energy, which would give it favorable financing to expand its current demonstration plant to produce 250 megawatts worth of cells per year, said co-founder Craig Stauffer.

Solar Junction cells are designed to be fitted into concentrating photovoltaic (CPV) solar collectors. Originally used in space, CPV systems concentrate the light hundreds of times using mirrors and lenses onto a small but relatively efficiency solar cell. They are typically mounted on racks to follow the sun in desert areas and are used for installations up to 50 megawatts.

The company, which was spun out of Stanford University, last month said that the National Renewable Energy Laboratory certified its cell to operate at 41.4 percent efficiency. For comparison, silicon solar cells are in the range of 15 percent or 20 percent efficient at converting sunlight to electricity.

These types of cells, called multijunction cells, achieve those higher conversion rates by using different materials than the traditional silicon cell and multiple semiconductors within a single package. During manufacturing, there are multiple layers of material deposited onto a gallium arsenide substrate, with each layer optimized to convert a different portion of the sunlight's spectrum.

"In essence, you have three basic subcell materials that take in some light and pass the rest to the next. They are connected serially inside the device just like battery cells," Stauffer explained. There could be up to 20 layers of material used on each cell which is usually a square of about five millimeters, or just a fraction of an inch.

The main customers for these multijunction cells are CPV solar makers such as Amonix and Concentrix Solar in Germany. But even though this technology has been around for years, it still hasn't become as established or widely used for wholesale electricity production as regular flat solar panels.

Multijunction cells are more complex and expensive. But Stauffer said that the costs of CPV systems with those cells are getting more attractive due to efficiency gains and higher levels of concentration. CPV solar collectors can now concentrate light 1,000 times, compared to 500 times in the past year or two, he said.

Solar Junction expects to stand out from other multijunction suppliers with better reliability in high temperatures and higher efficiency, which Stauffer projects will go over 50 percent in five years as the company adds more layers to capture different wavelengths of light.

Updated at 8:20 a.m. PT with correction to unit conversion.