(Reuters) – U.S. solar company Calisolar Inc. received a conditional commitment for a $275 million federal loan guarantee to ramp up a silicon manufacturing facility in Ohio, the Department of Energy said on Thursday. Calisolar, a private company in Ohio, will use the grant funding to commercialize a solar silicon manufacturing process to produce silcon. “This innovative manufacturing process offers significant competitive advantages that will help the U.S. to out-innovate and out-compete our global competitors,” Energy Secretary Steven Chu said in a statement. Silicon is the key raw material used in photovoltaic solar cells that turn sunlight into electricity. Silconâ€™s high cost is the major reason that solar power is more expensive than traditional sources such as coal and gas. Calisolar’s Ohio plant will have the capacity to produce 16,000 metric tons of silicon annually and will create nearly 1,100 permanent jobs.