Abound Solar to compete on cost after closing on a sunny $510 million

Abound Solar announced today it has closed on a $400 million loan guarantee from the Department of Energy and an additional $110 million in equity financing from venture capitalists.

The company makes cadmium telluride thin-film solar modules (pictured) for large solar arrays. Its approach of using cadmium telluride to make thin-film panels is similar to that of industry leader First Solar’s. Abound says it aims to make the cost of solar power competitive with traditional electricity today.

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“We certainly intend to be, in very short order, one of the lowest-cost producers on the planet. Much lower cost than the crystalline (silicon) guys,” said investor and DCM general partner Tom Blaisdell in an earlier interview with VentureBeat — his firm also put money in this round.

Abound is among the top solar companies with good chances of an IPO in the near future, alongside Amonix and Enphase, according to Lux Research. Fellow capital-rich solar startup BrightSource Energy is reportedly planning to float an IPO in 2011 — it’s riding high with the start of its massive Ivanpah solar thermal desert installation, for which it got a $1.4 billion loan guarantee from the DOE and a $300 million investment from NRG Enegy.

Abound says it will use the new funds to expand manufacturing capacity (already underway) at its existing facility in Colorado and at a second site under construction in Indiana. When both plants are complete, Abound Solar says it will have a capacity of 840 megawatts of solar modules per year.

Abound has raised about $260 million in equity financing since the company’s inception in 2007. Participants in this round were Invus Group, Bohemian Companies, DCM, Technology Partners and new investors BP Alternative Energy Ventures and West Hill Companies.