There are three things you need to know about Bill Gross, the serial entrepreneur and founder of incubator Idealab. He knows how to spot markets, he thinks big, and he likes to win—and usually does.

By the time he graduated from college, Mr. Gross had sold two of the three companies he started, including GNP Development, the maker of a natural language product for Lotus 1-2-3 called Hal, which was snapped up by Lotus. In 1991, he started Knowledge Adventure, which became the world’s third-largest educational software publisher before it was acquired by Cendant Software. And during the dot-com boom he created dozens of Internet companies, among them pay-per-click firm Overture, which he sold to Yahoo in 2003 for $1.6 billion.

So it should come as no surprise that Mr. Gross is now setting his sights on reinventing energy, the next big disruption. The world market for pollution-free, onsite electricity generation is worth an estimated $2 trillion, he says, and he expects to grow his share. “We can have a big impact not only in the U.S., but in the developing world,” says Mr. Gross.

Looking to the Sun

He’s thinking solar energy. His latest company, Energy Innovations, developed a rooftop photovoltaic-tracking concentrator system called the Sunflower. The goal: bring the cost of solar energy below that of utility-supplied electricity and create a mass market, something lots of others have tried to do for decades.

All have failed, but Mr. Gross is determined to prove it can be done. No newbie to solar, his first company—formed at age 15—was built around a parabola-shaped dish that used the sun’s rays to cook hot dogs. He sold plans for the contraption in the back of Popular Science for $4 each, making $40,000, enough to put himself through the California Institute of Technology.

After the dot-com crash in 2000, Mr. Gross says he started to think about what he wanted to do with his life and about how he could make a difference. California’s energy crunch prompted him to revisit solar.  

When he examined the sector, he found that little had changed in 30 years. The problem: Photovoltaic cells, which convert sunlight directly into electricity, are made from expensive silicon and cost three times as much as traditional sources of power. Efficiencies in manufacturing had started to lower the cost, but only incrementally. “It is all about the price,” says Mr. Gross. “It is the only thing that matters.”

More Productive, More Payback

Enter Energy Innovations’ Sunflower—a patented array of 25 mirrors powered by one $4 microprocessor and two $4 stepper motors that increases the amount of sun hitting each solar cell, making each more productive.

By replacing large amounts of very expensive, silicon-based photovoltaic cells with inexpensive mirrors, Energy Innovations expects to drive down the cost of solar electricity by half or more.

The company has already sold out of its first production run of its systems for large, commercial flat rooftops. Installations, typically generating 100 kilowatts, will begin in early 2006. After rebates, Mr. Gross says corporate buyers in the United States would pay an average $150,000 per system—for a $40,000 reduction in annual electricity bills. Company officials say that if rising oil and natural gas prices continue their dramatic impact on electricity rates, the savings could be greater and payback periods shorter.

Once the technology evolves, Mr. Gross says he would like to design inexpensive home systems not only for the U.S., but for villages anywhere that are not connected to electricity grids.

Energy Innovations claims it has already cut the payback period from 10 years to five. “If we can get it to two and a half, then we are beating fossil fuels and it will be a nice business,” says Mr. Gross. “If we can cut it again, by another factor of two, then we will change the world.”