Investors have gotten used to nanotech companies being long on promise but short on products. A recent announcement from Nanosolar, however, shows that at least one company aims to break the mold.

I've been watching this startup company and the new solar-cell technology it's developed. Nanosolar hopes to dramatically reduce the cost of solar power by manufacturing solar cells using a semiconductor ink and a deposition process similar to inkjet printing. Now the company plans to invest $100 million in a facility for the high-volume production of solar cells, with an annual production capacity of 450 megawatts. In comparison, SunPower (NYSE:SPWR) expects its capacity to reach 108 megawatts by the end of this year.

Nanosolar claims to have some big advantages over other solar-cell manufacturers, such as SunPower, China-based SuntechPower (NYSE:STP), and DayStarTechnologies (NASDAQ:DSTI). Observant Fools may know that producers of polysilicon, such as MEMC Electronic Materials (NYSE:WFR), have been making boatloads of money from solar-cell manufacturers' strong demand. Nanosolar's process doesn't use polysilcon, so it doesn't have to compete for the limited supply that SunPower and Suntech use as the foundation for their solar cells. And compared to DayStar, which makes non-silicon-based, thin-film solar cells, Nanosolar's manufacturing process should be a lot easier.

Lastly, Nanosolar claims that its competitors would have to spend upwards of $1 billion to build a plant with as much production capacity. I'm not sure that this is accurate, however. According to this link, Nanosolar doesn't have much of a capital-cost advantage.

Several knowledgeable people seem to believe in Nanosolar's technology. Last year, the company managed to snag a top executive from IBM's (NYSE:IBM) manufacturing division, as well as the head of R&D from Shell's solar division.

Nonetheless, the company does face pitfalls. Solar panels must last 20 years or more in a harsh environment -- the top of people's roofs. While silicon-based solar panels have proven their toughness over the years, Nanosolar's panels have not, although the company is confident that they can withstand the elements.

I'll be interested to see what develops at Nanosolar over the next several years. If its technology is effective and relatively inexpensive, this company might do a great job of growing the solar-power market.

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Fool contributor Dan Bloom has no financial interest in any of the companies mentioned. He wishes there was a little less solar power shining downward at this time of year. Dan welcomes your comments at