"What we have here is a new revolutionary product that cuts the barriers of cost," ATS Chief Executive Klaus Woerner told Reuters. "Our technology can stand on its own in the marketplace, as a viable energy alternative."

ATS stock rose in response to the news, ending up C$1.75, or 10 percent, at C$19.25 on the Toronto Stock Exchange.

Energy experts said the technology could make huge strides in lighting up parts of the developing world where there is no electricity and also help the developed world, which is seeking environmentally friendly ways to generate power. But they also warned that mass market application could take decades.

"It is technology that is not even out in the market yet. Solar technology is a niche technology and because of weather conditions there are some geographical regions where it is less applicable," said an analyst, who requested anonymity.

Using the sun to make electricity could eventually help power firms meet demand during peak summer periods, when customers crank up air conditioning to stay cool.

"These cells could have a substantial impact if this new technology is cheaper than other ones," said Andrew Pape-Salmon, Vancouver-based director of sustainable energy for environmental think tank Pembina Institute.

Demand for solar energy is growing by more than 30 percent a year, he said.

ATS, based in Cambridge, Ontario, said its photovoltaic technology, called Spheral Solar Technology, will use tiny silicon beads bonded in an aluminum foil.

The cells will use a fraction of the silicon in current solar cells, more than halving the cost of power generation.

A CELL IN A ROOFING TILE

Woerner said the cells will be lightweight and pliable and can be used in homes, cars and industry.

"(These cells) can be put into roofing tiles, roofing shingle systems, incorporated into factory walls, cars, as they are seamless with structures," Woerner said.

Canada's government said it was providing ATS with C$29.5 million ($19 million) in investment to help fund production.

"Projects like this one in the field of solar energy represent steps towards decreasing harmful emissions and providing cleaner air for all," Karen Redman, parliamentary secretary to Environment Minister David Anderson, said.

ATS said it had already started design work on a 120,000-square-foot automated production pilot facility, and it will need nearly C$40 million to get production under way.

It said it expects to spend between C$80 million and C$85 million over the next three years and will sell the cells through a new subsidiary called Spheral Power Inc.

"We generally look for returns between 13 percent to 15 percent on capital. Here, the return will be substantially higher," Chief Financial Officer Ron Jutras said.

"There are two billion people around the world without electricity and that is just the beginning."

Jutras gave no details, but he said sales of solar cells could one day surpass ATS' existing sales. ATS revenues were C$549.5 million in the year to March 2002, down 23 percent from fiscal 2001.

The analyst said Jutras' figures were "a bit bullish."

"Their sales from this one facility are going to be C$60 million and the cost to open it is C$80 million. That just does not make sense. They'll have to bring costs down."

Siemens , BP plc , Royal Dutch/Shell and AstroPower , the world's largest independent maker of solar electric power, are some of the big names developing solar cell technologies or selling them.

Woerner said he is in talks with firms around the world, from roofmakers to energy companies, to market the cells.

ATS is no fledgling in the solar industry, having bought France-based Photowatt International SA in 1997, which it says is the seventh-largest solar manufacturer in the world and one of the few profitable solar energy companies globally.

The basis for the technology used in ATS cells was laid several years ago at Texas Instruments . ATS bought the technology a few years ago and improved it and has more than 40 patents protecting it.