The solar breakthrough that could help the US compete With China

The new technology comes from an Israeli startup that promises to simplify one of the most cumbersome steps in solar manufacturing and cut costs by reducing the amount of silver needed to capture sunlight on the panels.

The startup, called Lumet, is the brainchild of Benny Landa, who founded the company that developed the first digital printing press. That company was sold to HP for $830 million in the early 2000s. Lumet is working with Bank of America to raise hundreds of millions of dollars in the coming months, Landa said.

South Korea’s Hanwha Group says it will be the first company to use Lumet’s technology. Hanwha’s Qcells unit, one of the biggest solar-panel makers outside China, is building a multibillion-dollar solar supply chain in Georgia. The company expects the financial savings and performance gains to help it compete with low-cost products from the world’s biggest producer.

Qcells is expected to be one of the biggest potential beneficiaries from incentives in the 2022 U.S. climate law and a recently announced tariff increase on Chinese solar cells. The company said recently it is closing its only factory in China.

Chinese solar panels can be half the price of panels made elsewhere, industry analysts say, putting pressure on companies to cut costs. “We know we can’t depend on trade barriers or subsidies to make us competitive," Danielle Merfeld, global chief technology officer at Qcells, said in an interview. “We have to keep innovating."

Plummeting costs have made solar power one of the cheapest and fastest-growing sources of energy globally. Further advances can reduce the need for fossil fuels to meet rising demand for electricity and help limit climate change.

Solar panels account for a small portion of overall project costs, but bigger contributors like labor, permitting and financing expenses are less flexible.

The main building blocks in solar panels are polysilicon wafers, which are treated with chemicals and silver to produce solar cells that can collect energy from the sun. Those cells are connected to get finished modules.

The step that uses silver and is being overhauled by Lumet is called metallization. It is one of the most expensive parts of cell assembly. The process uses screen printing techniques that rely on squeegeeing a silver paste through a mesh screen in a process similar to stenciling, then drying it out. The silver is coated on the cell in ultrathin shapes, known as fingers, for capturing sunlight.

Making the fingers as thin and efficient as possible has been critical to reducing solar costs because silver is expensive. Prices for the precious metal have recently risen to their highest level in more than a decade—above $32 a troy ounce—buoyed in part by strong solar demand.

Current printing techniques have reached their limit, Lumet says. The company coats the surface of plastic films with silver paste in precise patterns. That film then gets pressed onto preheated solar cells. The elevated temperatures make the pattern stick on the cell, so the film can then be peeled off.

The process can produce thinner silver fingers that use less metal and are specially placed to increase the amount of light captured by each solar cell, Lumet says. Eliminating bulky screen printing and drying equipment and automating the process in a single machine generates cost savings and performance gains on each cell, it claims.

The company is talking to other potential customers and plans to establish factories in the U.S. and China to begin production next year, Landa said.

Qcells has been testing Lumet’s process for nine months and talking to the company for two years. Qcells declined to provide specifics on when it would deploy the technology at specific factories and the overall cost reductions it is targeting.

Its $2.5 billion Georgia supply-chain effort is on track to be completed by the end of the year and will supply big customers including Microsoft. Expanded module assembly is up and running, with ingot and wafer production expected to start by September and cell production to follow by December, Merfeld said.

Write to Amrith Ramkumar at amrith.ramkumar@wsj.com