Intel Inside solar cells: mixed bag?

Santa Clara, California-based Intel (NASDAQ: INTC), today announced it's spinning off solar assets to form an independent photovoltaic cell maker called SpectraWatt.

And that's got people talking.

Intel Capital, the company's investment arm, said it is leading a $50 million investment round in SpectraWatt.

According to the Santa Clara-based company, other investors include Cogentrix Energy, a wholly-owned subsidiary of Goldman Sachs, PCG Clean Energy and Technology Fund and solar module manufacturer, Solon AG.

Intel said the newly formed company is to manufacture and supply PV cells to solar module makers, while concentrating on development efforts to improve current manufacturing processes and capabilities with the goal of reducing the cost of PV energy.

Paula Mints, a principal analyst for Navigant Consulting’s PV services program told Cleantech Group today she’s optimistic about Intel’s move in crystalline silicon solar.

“It’s exciting, and I’m never excited,” said Mints.

Even though the industry is poised for continued growth, Mints cautioned that the solar PV market is not for the faint of heart, nor the company that hasn’t done its homework.

According to Mints, the market is “in accelerated growth right now,” so companies wanting to get into the market should do so now, she suggested, even though the U.S. federal tax credit for solar doesn't look like it will be renewed this year.

With the research, capital and force that are Intel, Mints said she can’t imagine the industry slowing enough to have an adverse affect on the spin off.

“It’s difficult for me to imagine that growth will slow enough to believe that Intel will have difficulty serving a market,” reiterated Mints.

But not all industry analysts are optimistic of Intel’s move.

Travis Bradford, president of solar analyst firm the Prometheus Institute, said he doesn’t understand what Intel brings to the space, and he suggests the entrance might be too late.

“A lot of capital has been invested in the last three or four years,” said Bradford. “The longer you wait, the more expensive it will be to get into the market. There is some chance they’ve waited too long.”

Bradford doubted Intel's competence in solar.

“Honestly, making PVs is more like making microwave ovens than processors.”

Earlier this month, Bosch made a hefty €546 million bid for Germany’s ersol Solar Energy AG in an effort to pay its way into the ever-burgeoning solar market (see Bosch’s €546.4 million bid for ersol).

Meanwhile IBM (NYSE: IBM) and Hewlett-Packard Hewlett-Packard (NYSE: HPQ) have made their own moves in an effort to get closer to solar.

Just today, Big Blue announced plans to collaborate with Tokyo Kogyo on CIGS (see IBM, Tokyo Ohka Kogyo to work on thin film solar).

While earlier this month Hewlett-Packard made an attempt to put a finger on the pulsing solar market by agreeing to license its transistor technology to Xtreme Energetics (see HP to license technology to solar startup).

With the billions of R&D Intel traditionally throws around for its chips, both Mints and Bradford agree today’s announcement has the potential to bring an interesting offering to the market.

Intel said it expects the deal to close in the second quarter of 2008, with first product shipments slated for mid-2009.