Massachusetts-based 1366 Technologies announced today that it has received $20 million in funding to begin commercially producing its cost effective solar modules.

Investors North Bridge Venture Partners and Polaris Venture Partners were joined this week by Korea's Hanwha Chemical and Ventizz Capital Fund IV LP.

“This is great validation from the industry,” said Craig Lund, 1366’s director of business development. “It’s one thing to get money from investors and another to get a vote of confidence from potential clients.”

The company devoted all of its energy a year ago to developing a solar wafer that didn’t have to be cut from a big sheet of silicon, wasting almost half of the costly material, Lund said, and 1366 set out to develop solar wafers with silicon poured into molds and created individually.

“Often times, the best ideas are the simplest ones,” Lund said. “But we obviously weren’t the first company to think of it. This stuff is hard. It’s not easy to turn a four-step process into a one-step process.”

The company aimed to reduce the overall cost of solar modules by reducing the most expensive individual part that makes them work.

“The wafer is about 50 to 55 percent of the cost,” Lund said. “So when you can reduce the cost of the wafer by 80 to 90 percent, you cut the overall cost by about 40 percent.”

The new method for producing wafers could lead to dramatic drops in solar module costs in the near future as 1366’s method becomes industry standard, analysts predict.

The company experienced some success early on, but on a small scale. Its first silicon wafers were only 1 inch in diameter, Lund said. The standard size wafer in the solar industry is 6 inches. Some studied improvements allowed 1366 to slowly grow the wafers. And now, a year after the company produced its first 1 inch, one-step wafer, it’s making traditional six-inch ones without wasting sheets of costly silicon, Lund said.

That was a significant accomplishment. But it still takes a significant investment to move from making the wafers to producing them commercially.

“Now we need to move into small scale commercial manufacturing,” Lund said. “That’s a big step, and that’s what this funding allows us to do.”

Pictured: From Left to Right: Carmichael Roberts, Chairman of the Board of directors for 1366 Technologies, Dr. Ely Sachs, CTO of 1366 Technologies, and Frank van Mierlo, President of 1366 Technologies. Photo taken at MIT during President Obama's speech on energy.