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PALO ALTO, CA-Nanosolar Inc. has leased a building in San Jose for what it says will be the world’s most productive solar cell fabrication facility. The Palo Alto, CA-based company, which said in June it would locate the operation somewhere in the Bay Area, has leased 90,000 sf of a 203,800-sf building at 5521 Hellyer Ave. that is owned by Mission West Properties.

The building Nanosolar is retrofitting was constructed in 1996 by Mission West for Stratacom. Cisco Systems came to own it by acquiring Stratacom. Mission West Properties bought the building back vacant in 2005 for slightly more than $14 million, according to SEC filings.

The negotiated lease rate was not disclosed by the parties involved but local brokerage sources tell GlobeSt.com that the monthly rate came in under $1 per sf. A source at Nanosolar tells GlobeSt.com that no brokers were involved in the deal.

Nansolar’s technology does not utilize silicon crystals, which is how 90% of the world’s solar energy is currently produced. Instead, Nanosolar and others such as San Jose-based Miasole use a copper alloy that also absorbs light and spits out electricity. Moreover, the copper alloy solar cells are paper-thin and flexible, allowing them to be shaped to fit on a variety of building components, and the cost to produce them is expected to be significantly less than silicon crystal technology.

Nanosolar is presently in pilot production of its solar cells in Palo Alto and has started ordering volume production equipment for the new factory. The new plant is being designed to produce upward of 1 million solar panels every year, enough to produce 430 megawatts of power–nearly triple the output of all existing solar panel manufacturing facilities in the U.S. Such wattage is enough to power more than 100,000 homes.

The cost to retrofit 5521 Hellyer for solar cell production has not yet been released. Werner Dumanski, Nanosolar’s head of manufacturing, in June described the investment as being much less than the estimated $1 billion it would cost to develop a similar-capacity factory that uses silicon crystals.

Nanosolar’s CEO, R. Martin Roscheisen founded the Internet company eGroups, which he sold to Yahoo in 2000 for $432 million. Nanosolar began pursuing its goal of affordable solar electricity in 2002, shortly after receiving seed money from Google founders Larry Page and Sergey Brin. Roscheisen says the past four years have been spent in commercial research and development, including two years of manufacturing process development and engineering. The company’s move to begin volume production of its product was sparked by a $100-million round of funding in June.

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