Most concepts at SpaceX are designed from the ground up and the parts are manufactured on site at SpaceX. The Merlin engine, which launches the Falcon rocket, is no exception.
The rockstar of SpaceX may be Elon Musk, but the lead man behind the fire power is Tom Mueller. He is the Vice President of Propulsion Development and founding employee at SpaceX. Musk sought Mueller out in 2001 when Musk decided to build his own rockets instead of buying some from the Russians. Musk caught wind of a rocket engine Mueller built in his garage and “apparently had a religious experience” once he saw it. If you didn’t know, Elon Musk used $100 million of his Paypal money to start SpaceX. That money was used to build the Merlin engine Mueller had designed. The Merlin engine is the first new American booster engine in ten years and only the second in the last 25 years.
The first iteration of the engine was the Merlin 1A. It was an ablatively cooled engine (interior is lined with a material that slowly burns away) and was on the Falcon 1 on the March 2006 and March 2007 flights. According to the Falcon 1 data sheet, Merlin 1A “drew on pintle injector concepts developed for the lunar module descent stage engine. Propellant was fed via a single shaft, dual impeller turbo-pump operating on a gas generator cycle. The turbo-pump also provided the high pressure kerosene for the hydraulic actuators, which then recycled into the low pressure inlet. This eliminated the need for a separate hydraulic power system and eliminated thrust vector control failure through loss of hydraulic fluid. A third use of the turbo-pump was to provide roll control by actuating the turbine exhaust nozzle.” This short video of Tom Muller drawing a diagram of the Merlin engine helped me wrap my head around how the engine generates so much power and the different roles the liquid oxygen and refine jet fuel play.
Working to improve the Merlin 1A manifolds, the Merlin 1B was developed. Five Merlin 1B engines were designed to power the Falcon 5 first stage and one Merlin would be placed on the second stage in place of twin Kestral engines. This configuration would allow the Falcon 5 to carry up to 6 metric tons to low earth orbit. Info on the 1B engine is sparse, from what I can tell the Merlin 1B never flew and was scrapped in 2006 to focus on developing the Merlin 1C engine, the current engine that powers the Falcon 9 first and second stage.
The Merlin 1C leaves the ablatively cooled engine behind for a regeneratively cooled thrust chamber which uses a refined form of jet fuel to first cool the combustion chamber and nozzle before being combined with the liquid oxygen to create thrust. This allows for higher performance without significantly increasing engine mass. The Merlin 1C has a 20% thrust increase of what was planned for the Merlin 1B. Nine Merlin 1C engines power the first stage of Falcon 9 and one Merlin Vacuum engine powers the second stage. The Merlin Vacuum engine is similar but with a larger exhaust section than the Merlin 1C and a much larger, radiatively cooled expansion nozzle.
So what now?
The Merlin 1D is in development and has seen some action in the later half of 2012. A test fire at McGregor in June 2012 and on the recent launch and hover of the Grasshopper. The Merlin 1D has an improved thrust from 95,000lbf at sea level to 140,000lbf and can throttle from 70-100%, currently two engines have to be shut off during ascent. The simpler design makes the engines lighter and easy to manufacture.
The Falcon Heavy is currently designed to use 27 of the Merlin 1D engines. Beyond that there is talk of a Merlin 2 which I understand would power a SpaceX super heavy lift vehicle which is apparently referred to around SpaceX as BFR, or big f–cking rocket.