The Silicon Valley-based thin film solar panel manufacturer Nanosolar is to significantly expand its global installed capacity after signing long-term supply deals with three European firms.

The company has signed agreements with Germany’s Belectric and Plain Energy, and with EDF Energies Nouvelles of France that will see it deliver up to 1 GW of solar panel capacity. The deals will help to reduce the cost of panel manufacturing, says Nanosolar.

Each of the supply agreements ranges from three to six years. All of the European firms have worked with Nanosolar as strategic partners since 2008.

Nanosolar manufactures thin film solar panels based on copper indium gallium selenide (CIGS) technology. The panels use relatively small amounts of silicon, making them cheaper than conventional photovoltaic solar panels, but are less efficient at converting sunlight into electricity.

Nanosolar believes that it will be able to surpass the $.60/W cost threshold within several years. “Leveraging its competitive CIGS solar cell and panel efficiencies in combination with proprietary printing techniques, Nanosolar can become the lowest-cost panel manufacturer at hundreds of megawatts of production versus gigawatts within the next several years,” said the firm in a statement.

It expects to reach an annual production capacity of 115 MW by the autumn of 2011, and then to at least double capacity every year.