JERUSALEM, ISRAEL: It may take a little bit of colour to create cheaper solar energy. Israeli start-up 3GSolar says it has developed the world's first commercial-size solar energy system that uses coloured dyes to turn sunlight into electricity.

The technology emerged from a relatively new field in solar energy that uses simple organic dyes instead of rare or costly materials, like silicon, which scare many consumers away from solar power.

Energy companies have been struggling for years to make dye-sensitized solar cells (DSC) large enough to be used in commercial-size systems. Such next generation cells could be used in cutting-edge applications, like windows that turn passing sun rays into electricity.

Japanese electronics conglomerate Sony Corp said last year it had developed dye-sensitized cells with an energy conversion efficiency of 10 per cent, a level seen necessary for commercial use, but that its technology was still in the research and development stage.

A 1.5 square metre prototype, boasting red panels, stands on the rooftop of the 3GSolar's Jerusalem laboratories. The company's founder, Jonathan Goldstein, says it is by far the largest in the world.

It transforms just seven percent of the sunlight it absorbs into electricity, but he said that its efficiency would increase steadily in the coming years.

Scaling up the size of solar panels has been hampered by problems of metal corrosion in their grids. 3GSolar would not disclose the exact process it used to overcome the obstacle.

"These cells, each individual one of 225 square centimeters, we believe are the largest of this type in the world and give a record-breaking current," Goldstein said.

Dye-sensitized solar cells are also known as Graetzel cells, after Michael Graetzel, a professor at Ecole Polytechnique Federale de Lausanne in Switzerland, who discovered them about 20 years ago.

He found that sunlight excites the dye and creates and electronic charge without the need for pricey semiconductors, similar to the way a plant uses chlorophyll to turn sunlight into energy through photosynthesis.

Graetzel told Reuters the dye-based technology has been gaining momentum in the renewable energy market.

He said there were key advantages over other systems.

These included lower costs, its ability to create electricity in cloudy areas or in non-peak sunlight, and the smaller amount of energy needed to manufacture the panels, which leaves a smaller carbon footprint.

Other companies, including Australia's Dyesol and Japan's Sharp Corp, have been racing to "scale up" dye solar cells to a commercial size, Graetzel said.

"3GSolar came up with a solution. They report to have a collector that doesn't corrode," Graetzel said. He added that the company has shown promising results from durability tests on their panels carried out over 1,500 hours at 85 degrees Celsius.

"They are not the only company working with DSC, but they have deliberately pushed their particular current collector technology first," he said.

Candle-lit villages

Ken Zweibel, director of George Washington University's Solar Institute, said dye cells should be pursued but they remain among the "low efficiency" group of solar cells.

"They are inching their way up in efficiency, and they appear to have some headroom," Zweibel said.

He added that the different colour options and range of applications may make dye cells more attractive. But he emphasized the importance of durability: "Can they warrantee 25 years outdoors as their competitors do?"

3GSolar says its first system - with two solar panels, a charge controller and a battery - will hit the market in two years. It will target the off-grid market in developing countries, where many villages still depend on candlelight.

The Brussels-based Alliance for Rural Electrification estimated the off-grid market at $1.5 billion.

3GSolar said its system will have a lifespan of about seven years and have an output of 110 watts, enough to power many types of refrigerators.

It will cost $400, less than similar silicon-based systems, when produced locally. That translates into 30 cents per kWh, which is still much higher than fossil fuels.

The company expects the price will come down as the lifespan increases and production costs drop.