In a major boost for thin-film solar technologies, HelioVolt Corporation said Wednesday it had secured a $77 million second round of funding.

The company said it would use the money to build a factory to manufacture thin-film panels using the company’s copper indium gallium selenide (CIGS) technology. The first factory, to be built at a yet undetermined location in the United States, will be capable of producing 20 megawatts worth of solar panels annually.

“This is to build our first factory and really to get into significant revenue and scale up the technology to conventional-size modules,” said HelioVolt founder and CEO B.J. Stanbery. “That’s where we need to go in order to drive costs down.”

The factory will be finished next year and in full swing by early 2009, he said.

Paladin Capital Group and the Masdar Clean Tech Fund, based in Abu Dhabi, led the round, bringing the Austin, Texas-based startup’s total funding to $87 million. Spanish solar energy company Solúcar Energia, Morgan Stanley Principal Investments and Sunton United Energy, along with New Enterprise Energy, an existing backer, also joined in the round.

Publicly traded First Solar, based in Phoenix, Arizona, also makes thin-film solar panels but uses a different semiconductor material, cadmium telluride. Thin-film technologies use little or no silicon, the costly material used in conventional panels. But they are less efficient at converting sunlight into electricity. HelioVolt is aiming for conversion efficiencies upwards of 10 percent, Mr. Stanbery said.

Thin-film is largely viewed as the next generation of solar energy technology, and HelioVolt isn’t alone in trying to corner the market. CIGS thin-film startups Nanosolar of Palo Alto, California, and Santa Clara, California-based Miasolé, are also vying for market share.

The challenge lies not only in making panels more efficient in converting solar energy into electricity, but also in making them more durable. CIGS has been shown to be “intrinsically stable,” Mr. Stanbery said, as long as it is protected from elements such as “humidity, rain, hail, bird poop.”

“It has properties that allow it to self-heal defects that have been formed,” he said.

But thin-film panels aren’t as hefty as their polycrystalline counterparts. HelioVolt claims, for instance, that its CIGS layer is 100 times thinner than that of regular silicon-based panels. HelioVolt sandwiches its CIGS material between glass plates; other thin-film companies apply it to flexible substrates. “The stability of it is the Achilles’ heel of thin-film technologies,” said Mr. Stanbery.

Manufacturing technology is another problem area. HelioVolt employs a high-speed process to prints its CIGS coatings with lasers. “We can process these [CIGS] devices that we’re doing now in three minutes,” Mr. Stanbery said, compared with 30 to 40 minutes using conventional processes.

Eventually, HelioVolt hopes it will be able to use that process to coat building materials like glass, steel, metal, and some polymers. But for now, it’s aiming to make basic modules, measuring roughly two-by-four feet, for both solar power plants and grid-connected systems.