Below is an article posted on Seeking Alpha earlier this week focusing on Natcore. We will also have Brien Lundin on the weekend show so please tune in tomorrow.

Apr. 15, 2015 8:56 PM ET

About: Natcore Technology Inc. (NTCXF) by: Michael Allison

Disclosure: The author is long NTCXF. (More…)The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.

Summary

• Natcore has the potential to create a real breakthrough in how solar cells and panels are made.
• The company has made tremendous steps forward with back contact and HIT cell technology.
• Natcore continues working closely with Fraunhofer and Eurotron.

For those of you who have read any of my articles on Natcore (OTCPK:NTCXF) in the past (here, here and here), you’ll know that this is a company I have high hopes for.

Especially because the company has a number of leading technologies it is currently working on bringing to commercialization. These technologies have the potential to create a real breakthrough in how solar cells and panels are made, reducing the costs of manufacturing them, avoiding the use of toxic chemicals and perhaps most importantly, significantly increasing the efficiency of solar cells and panels.

Following is the full interview I was pleased to have with Natcore’s President and CEO, Chuck Provini, and Director of Research and Technology, David Levy.

MA: To start off, some of my readers would like to know about the progress being made related to the memorandum of understanding (MoU) signed with the Australian group, Denzo Pty.

CP: Actually, that one has moved along quite nicely. Ken Matthews and Denzo were predominantly in the liquid gas business. It is the second-largest supplier in Australia. So, when we first met, he was interested in moving into solar. And what he was looking to do was align himself and Denzo with this Orange City to build holding tanks, delivery tanks for liquid gas, and then it kind of took on a life of its own, where he’s now gotten approval from the city to build solar cell facilities, solar panel facilities, as well as a power plant.

Now, before he got that approval, however, the Orange City engaged a consulting firm, a third-party consulting firm, that did due diligence on, not Ken, because they knew him, but the whole project itself in order to look at the economic feasibility of it, and a lot of due diligence on us, Natcore.

So we had a several conversations with their consultant: talked about not just our technologies, but our ability to implement them, etc., and I think it was just last week where we got a note from the consulting firm as well as Ken that he got exclusive rights to supervise, monitor and implement that program, which means that we’re part of it.

Some of the issues there still have to do with funding, and I think what they are looking to do to fund this project, which is not necessarily important to us, is through a waste-to-energy facility that’s going to generate the money to fund the solar stuff.

So, we’re pretty far along with that. In fact, Ken is going to be in Houston beginning of June, and we intend with him at that point, based on what he said, to actually sit down and sign something that’s going to be much more definitive in actually engaging Natcore at that point. This is what the intention is.

So that’s moved along pretty well, and again, when you’re dealing with governments, it sometimes takes longer, but we’ve gone through all the steps, he’s gone through all the steps, and he’s the only one that’s been selected and given the authority to control this project, which is a pretty big project.

MA: That’s good. Now anything on any of the other countries that are mentioned in that presentation? Is there anything beyond just talking with them at the moment that you can add more color on?

CP: There’s something called Orange Energy, which started in Poland. They were looking to build a huge project, somewhere up near a billion dollars, and we were going to be engaged – not necessarily to be the consultants, because they had their own capabilities in that area – but we’re going to deliver an R&D facility; we’re also going to deliver some of our best-of-breed folks that they didn’t have access to, etc. So we actually got as far as engaging and drafting a license agreement for Natcore.

Well, what’s happened with that is they have looked and are investigating the possibility of changing that facility from Poland, Krakow, where it was going to be, to upstate New York, because New York has got some very aggressive tax incentives for start-up businesses, and we’re kind of very involved in helping them do that.

In fact, and this is kind of premature, but one of the places we’re recommending is the Kodak Business Park, where we’re located. In fact, we’re working on signing a license agreement with them. This is a much bigger project, so it’s going to take a little longer, but that’s made an awful lot of progress also; in fact, last night, somewhere around two in the morning, I saw an email from them to the people at Kodak Park, expressing an interest in describing the project.

MA: So they want to manufacture solar panels, is that correct?

CP: No, they want to manufacture wafers, cells, panels, power plants – this is a huge project.

MA: And that would be, hopefully, with licensing your technology also.

CP: That’s correct.

MA: Okay. Any idea how soon we might see something that actually brings in some revenue?

CP: Well, either of those two things. We sign a license agreement, and in addition to that license agreement is a cheque. So, I would think both of those best-of-breed alternatives are the closest to revenue, and again, we’ll talk about what David’s going to bring in with regards to some issues as far as what we’re doing with the HIT cells, but I can’t say when, except we’re pretty far along. They told us what the license agreement should look like, we had our lawyers draft it up and send it to them, they came back with a couple of changes, but that could be, either of those two could be any day.

I would expect something, when we sit down in June in Houston, because Ken is coming here from Australia; I would expect something very tangible at that meeting.

MA: One of my readers asked: “Could you enquire about the commercialization of the tandem cell. Natcore has been ‘on the verge of commercializing black silicon’ for two years now, I’m sure there are very good reasons for this, but I’m curious if there are lessons learned along the way that allow them to predict the tandem cell date. My understanding is that’s where the majority of their revenue will come from anyway.”

CP: As far as time lines as to which are closer to someone actually paying us for it, the tandem cell is much further down the road.

Let’s stay with the first part of it – the black silicon application is part of a process. Unlike the back contacts and the HIT cells, those are specific products that we can make and deliver. The black silicon is something that is part of the anti-reflective coating process. It’s important, but it’s not a standalone thing.

The other side of that story is, people make solar cells very differently. If you go to twenty different manufacturers, you’re going to find ten different ways that they make it – using monocrystalline, polycrystalline, texturized, not texturized – and every one of those different ways is going to adjust how the black silicon might be used in their process. And each one of those has another optimization on how it might work or might not work.

So we still feel it’s important, but again, it’s part of the steps. What’s happened with us is that David has made such tremendous steps forward in the back contact laser and the HIT cells, and we’re a small company, so we adjust resources to what we think is the most important and the quickest to revenue. So we’ve adjusted our resources more to that right now.

But going back to answer your question. Most of what we’ve done with the tandem cell has been at Rice University. I’ll let David address the recent success they’ve had there, and the fact that at some point, we’re going to move that to Rochester.

DL: What they’ve been doing at Rice recently is creating these quantum dots, and one of the ways that you can assemble these quantum dots is to use a silicon wafer as one of the two layers (N or P) and the quantum dots as the other layer. And in that kind of test, you can independently show whether you’re able to make quantum dots that have the N or the P behavior.

So, recently what they were able to do at Rice University was make a cell with silicon wafer and one of their sets of quantum dots that actually performed very well, and so, that was a demonstration of the ability to make one of these layers. And that’s the information that we were just talking with them about very recently.

So, that is moving along. As Chuck says, we adjust resources to put things on the shorter term. The quantum dot cell obviously, in the future, is a technology that could really change the levels of efficiency that are achievable. So progress is being made at Rice University.

MA: Okay. In terms of what they’re doing at the University, in terms of research and making progress, is there research that has moved along this far, that you’re aware of, within other companies or other educational institutions?

DL: Yeah, there are other approaches being done. For instance, there is university research that is based upon materials like lead sulfide that perform and make quantum dots, although the question would be whether or not you would want to build a solar project based on lead. So, the technology at Rice University, what’s interesting about it is, for the moment it’s focused on materials like silicon and germanium, which are – silicon in particular – very abundant, very low-toxicity, and in fact, silicon is the ultimate objective of that project.

So there are other approaches going on, but it does look like the approach at Rice University is very interesting due to its use of silicon and the way they’re making it, which is an air-based process using silicon, silicon dioxide – materials that are readily available and fairly well understood.

CP: You know something else, where all this tandem cells and quantum dots really started was the University of New South Wales, with Martin Green’s group. And we have just brought on, a few months ago, Gavin Conibeer – he’s on our advisory board. He’s one of the folks that knows as much about this as anyone in the world, and we’ve also applied for some co-grants in conjunction with some things that he’s doing that will tie into that. So we’re doing the work at Rice, but we very well could be using some of the resources and get some government money to help do this at the University of New South Wales.

MA: Thanks. I’ve got another reader who asked: “Is there any further information on progress with Eurotron and/or Fraunhofer in terms of having a ready-for-market product?”

CP: Two different questions. But it’s kind of related. I’ll let David explain what their technology is and why it’s helpful to us.

DL: We’ve really had a lot of success, and the main focus now on the laser process, and particularly, the laser process back-contact cell. Eurotron contacted us, actually, when they learned about our process, because they have a way to incorporate back-contact cells into modules. The bottom line of their process is that it will allow Natcore to more easily incorporate our cells into a module. It has to do with the way they contact the back of the cell.

In terms of what the Eurotron/Natcore alliance brings is, that will accelerate our ability to take the technology that we’re working on in the lab right now, and actually truly demonstrate it in modules with large-area cells.

On our end, we have the laser back contact technology that we’re working on, and what Eurotron brings to the table is a particularly good way to; when you have a solar cell and you put it in a module, you need to actually connect that solar cell to, first of all to its neighbors, and then bring that electricity generated from all of those solar cells out of the module.

If you look at a conventional module, the way that’s done with front-back cells is you’ll actually see wires that go from the back of one of the cells to the front of the neighbor – there are two or three little wires that come up.

With a back-contact cell, you don’t need that – you can connect everything from the back of the cell. Then what Eurotron has is a technology that takes some of the burden of conducting electricity away from the cell, and does it instead in their module design, so that you can actually work with some designs that are very close to the ones that we’re currently working with in the lab right now.

When Eurotron got involved, and we understood the synergy that exists there, what that has the potential to do is further accelerate our ability to take what we’re doing in the lab and advance it very quickly in the lab, and move that to something where we start to make modules and demonstrate it in modules.

And what we want to do in this project, obviously, is engage manufacturing partners and take our technology, not just as a laboratory thing, but as full-sized cells in modules is really the way to demonstrate it.

CP: And then the other question was on Fraunhofer. Our relationship with Fraunhofer has kind of taken on a life of its own. We initially started working with them to help us with black silicon, and we had some good successes there.

They then saw a best-of-breed press release we did, and they contacted us and said, “We’re kind of in that business, and we’re very good at it, but we’re a non-profit organization, so we really can’t go out and sell it too much; we would love to combine with you, so when you need our resources for engineering and different things like that, you can use us.”

So we’ve included them on some of these best-of-breed discussions and proposals, and they’re very helpful in even participating in some of the presentations and phone calls, etc.

What we’re going to do next with them technology-wise though is, they also then saw a press release about David’s success with the HIT cell and the low-temperature laser process. At this point, I’m going to hand it off to David to explain further.

DL: This heterojunction cell that we’re working on, there’s probably quite a bit of agreement in the industry that this really is the cell of the future. It’s the basic cell structure that was able to achieve the recent world record for a silicon solar cell.

One of the things that we’re very excited about is that while the industry doesn’t know how to make these cells cost-effectively, there’s an understanding in the industry that these types of cells are really the right path for high efficiency in the future.

And Fraunhofer, obviously seeing that too, we recently learned that they are bringing on-line a laboratory dedicated to these types of cells. Now, that’s not to say that they’re making the same type of cell as Natcore; what Natcore brings, then, is we are working on what we feel is a particularly simple and low-cost method to utilize this type of technology. What Fraunhofer appears to be doing, and we are just learning about this, is building a world-class lab to work on many aspects of this type of technology.

So knowing that lab is around, I could easily see that this is one of things that it would be great to interact with Fraunhofer on in the near future.

MA: How close is your relationship with Eurotron and Fraunhofer. Are you guys regularly in contact, in discussion with them about projects your working on?

CP: Absolutely! In fact, we’ll start with Eurotron. I will speak with them at least once a week on a project. Sometimes it’s us referring someone to them, sometimes it’s them integrating. We’ve got some people visiting us in Rochester next week who want to build this HIT cell and a HIT cell facility, we’re going to Eurotron, they’re introducing us to their manufacturers, and they’re sending us sample HIT cell panels that these folks can test. So we’re working very closely together.

And Fraunhofer, I don’t call them once a week, they call me once a week wanting to know when we’re going to get started on the HIT cell with them. So we’re very close with both of them, and I think as we mature, these are going to be our first manufacturers. Eurotron, which is a big company, but not a huge company, is just the right size for us.

Because they’ve got a technology that’s truly unique. There’s something called cell-to-module energy loss. You take a very sophisticated solar cell, and in essence, you put it in a glass box. So you lose energy when you put it into a panel. And that energy loss can be somewhere upwards of ten percent.

Eurotron not only claims that they have zero cell-to-module energy loss, but they say they have an energy gain. So they’re not just an equipment manufacturer, but they have got, so far as I’ve seen, the absolute best module equipment facility that exists.

DL: And one other comment on working together too with Eurotron in terms of plans with them, we do have formal plans, once we get our cells where they need, to be in terms of compatibility with their process – and I suspect this will be in a couple of months’ time frame – to actually go ahead and build cells (demonstrator cells to show to a manufacturer) with them. So that’s part of the agreements we have with Eurotron, to actually work with them on that.

I think revenue could come fairly quickly after that, because what we’re looking to do is then take those demonstrator cells to a manufacturer. What we would have at that point then – and we’ve currently been very busy with intellectual property along the lines of these laser processed cells – and so what we would have at that point too is a patent portfolio, which is growing right now, to also take to a manufacturer with the laser technology.

MA: Are you still involved with the company in China? (Red Solar)

CP: What we did with them – we’re still very close with them – is what I think we needed to do with them so far. We’ve slowed that process down until we made sure we tidied up our IP protection a little bit. We took some of the stuff we were doing with them and moved it to Fraunhofer, where we felt a little safer, because we were getting to the point in that evolution where there were new things happening, and we wanted to make sure that we were in control of it.

But I would suspect that once we do something with a commercial manufacturer in China, it’s going to be with them (Red Solar), because we’re still very close to them.

MA: Besides the Polish company Orange Energy, and Orange City in Australia, as far as the other countries mentioned in your corporate presentation slides, are any of those moving further on into a potential project?

CP: I think the other one is South Africa. The thing there that is kind of unique with the individual we’re working with is that he’s not trying to build huge facilities. What he’s trying to do is to build five- and ten-megawatt facilities to bring out to different farmers so that they have electricity and they can fund themselves, because fuel is very expensive there.

So what we’re doing there is kind of coordinating building, in essence, a small package, a “solar facility light.” And what he’s introduced us to are some very unique inverters and tracking systems for those systems, because with those smaller systems, you don’t have the luxury of space, so you have to make sure you’ve maximized everything from tracking, concentrators, etc.

So I would think that even though this is not a technology thing, it’s more of a just make it, the reason he’s interested in us is that in exchange for us partnering with him in this, as our technology comes down the line, he’s going to have access to it.

I would think that’s another thing that could happen very quickly, because all we need is one farmer and/or a cattle rancher or whatever to say, “Yes, I want one of these, here’s a cheque to start building it.”

The other thing is, the Philippines is going to be an area ripe for solar. Manila arguably is the most densely populated city in the world, and they have brownouts regularly in the afternoon. And the other side to that is the Philippines has seven thousand islands. So, when you move out of Manila into some of these outlying islands, you’re devoid of the grid. So, that’s another area. We’re working with someone who’s working directly with the Department of Energy in the government there, but that’ll take a little bit of time; but I feel very comfortable something’s going to materialize there sooner than later.

MA: Those are the questions that I had from readers. Is there anything else that you guys wanted to add before we end this?

CP: Let me just give kind of a fifty thousand foot-level perspective. When China stopped subsidizing the solar industry, they were subsidizing it for ten or fifteen years, and as a result of that, there was no need for new technology. So solar, right now, basically is dealing with technology that is ten or fifteen years old.

The United States kind of wandered off into this thin-film area when polysilicon was so expensive. It (polysilicon) went from $500/kg to $20/kg, so it just destroyed the whole thin-film, Solyndra thing. So now, when China’s no longer subsidizing it, everybody’s looking for technology.

So right now, because of that lack of technology and because of what David’s doing in Rochester, this HIT cell, which we feel is the most direct path to twenty-five percent efficiency, is what the world is looking at. I think that is one of the most important things that is happening now.

And it’s not taking away from black silicon and all the other things we’re doing, because at some point, black silicon becomes part of this; but the idea to get our cells – the HIT cell structure with back contacts – to the point where we’re producing a cell in the mid-teens to high-teens, once we get to that point. We now have something that the industry’s going to want, and we can knock on doors – and I don’t think we’re all that far away from that.

We had a discussion yesterday with David, and we’ve kind of stopped on trying to improve the efficiency, because he says he has another way – a simpler way for the operations – which would make it even more effective. So I think that’s really the issue – that this twenty-five percent efficient HIT cell is something that’s not too far away, not like the tandem solar cell which is way down the road, but this is something that can be there sooner than later.

DL: I agree with that, and we are making a lot of progress, and I’m very, very, very excited about the way things are going with respect to these cells. So my mission here is that it will not be a long time ’til we have the kind of numbers Chuck is talking about to go knock on doors.

MA: Thank you very much.

Note: Thanks for Pat Zubil for arranging the telephone interview I had with Chuck Provini and David Levy. They have never turned down any of my requests to speak with them personally, and I really appreciate that, as I’m sure all of you reading this do also.

The transcript of this interview is not provided, in any manner, as advice to invest in Natcore Solar. It is simply to update everyone on the progress the company is currently making with its technology in terms of bringing it to the commercialization phase.

Editor’s Note: This article covers one or more stocks trading at less than $1 per share and/or with less than a $100 million market cap. Please be aware of the risks associated with these stocks.