Hybrid solar cell developer Silevo may be based in California, but it plans to start commercial production in China in May and is now expecting a lower production cost than when I first learned about the company last October.

The startup is building a 32 MW production line in Hangzhou, and when I caught up with its vice president of business development and marketing, Chris Beitel, at PV America West recently, he said the production cost from the first line should hit $0.98 per watt instead of the $1.10 per watt estimate from last fall. At 500 MW of annual production capacity, the manufacturing cost should fall to $0.61 per watt. (Check out my video interview with Chris above).

The lower cost projection is largely a result of cheaper silicon. Silevo was looking at $50 per kilogram when it did its calculation last year. Silicon pricing fell dramatically in 2011, said NPD Solarbuzz, and it is now around $30 per kilogram.

Cheaper silicon has led to cheaper cells. But silicon cell prices also have fallen quickly in recent years because there's been an oversupply of them, and that has put pressure on manufacturers to boost their cells’ efficiencies as one of several ways to reduce production costs. Highly efficient solar panels require less land to produce the same amount of power, and that is attractive not only for residential and commercial rooftop installations but also distributed utility-scale projects. Just this week, SunPower announced it’s now producing monocrystalline cells with up to 24 percent efficiency.

Among the more novel silicon-based technologies being incorporated by major manufactureres is the use of hybrid silicon wafers grown with a mix of mono- and polycrystalline structures. The idea of using much thinner monocrystalline silicon wafers also is in the works. 

Silevo’s hybrid cell uses monocrystalline silicon and adds both a “tunneling oxide layer” and amorphous silicon layers. The result is highly efficient cells that don’t lose their performance as quickly in hot weather, the company said. The structure of Silevo’s cell shares similarities with Sanyo’s HIT cell, which is monocrystalline silicon hugged by amorphous silicon layers. 

Sandia National Laboratory also just verified that Silevo’s cells have reached 21.2 percent efficiency, Beitel said. At the trade show, the startup, founded in 2007, was touting 21 percent cells and 18 percent panels.

The company has publicly disclosed $55 million in venture capital funding from investors including three China-based firms: DT Capital (affiliated with Madrone Capital), NewMargin Ventures, and GSR Ventures (connected to Mayfield Fund).