Semix Inc. of Gaithersburg and the U.S. Energy Department are expected this week to sign a cooperative agreement involving approximately $10 million to expand production of a new type of silicon material used to make solar electric power cells.

Though DOE officials would not comment while the contract was still being negotiated, another knowledgeable source described the funds as a government loan, modeled after an agreement made earlier with Texas Instruments.

DOE would receive one percent of Semix profits annually as repayment.

The new silicon material was developed about five years ago by Joseph Lindmayer, president of both Semix Inc. and of Solarex Corp. in Rockville, the world's largest producer of solar electric cells.

Solarex officials describe the material as a major breakthrough that will bring down the cost of photovoltaic equipment by cutting in half the cost of the base material -- silicon.

Though in raw form one of the most abundant substances on earth, purified silicon is a material in high demand. It is used for computer chips to make everything from talking toys to hand-held computers, and a Solarex official said the company has had to scramble to find enough to make solar cells.

The new material is said to lend itself better to mass production techniques and to require half the time to make.

Electric power generated by Solarex cells is said to cost about $3 per kilowatt hour, or approaching the price of diesel-produced power.

Solarex officials say the new material will help bring that cost closer to DOE's goal of making solar electricity competitive with utility-generated power by 1986.

Cells made of the new material already are being produced at the Semix plant in Gaithersburg for use at the rapidly expanding Solarex facility. Solarex, a privately held company, said it had sales last year of about $10 million.