Thin-film module manufacturing costs took a significant fall in the second quarter as First Solar continued to lead the PV industry in the lowest cost-per-watt race. The CdTe thin film producer saw manufacturing cost decline 13% year over year, reaching US$0.76/watt in the second quarter, another new industry record. Annual throughput per line was up 6% quarter over quarter to 59.0 MW. On a total capacity basis, the increase would push operating capacity from 2.1 to 2.2 GW by 2012. Conversion efficiencies, which had remained static for several quarters, actually inched higher to 11.2%, compared to 11.1% in preceding quarters. Quarterly net sales were reported as US$587.9 million, compared to first-quarter 2010 revenues of US$568.0 million.
First Solar forecasted net sales of US$2.5 billion to US$2.6 billion in 2010, reflecting reallocation of module capacity from its systems business to meet increased demand from European customers. However, the company projected net sales of between US$2.6 billion and US$2.7 billion for the year in the previous quarter's guidance. Lower ASPs were to blame for the revenue guidance decline.
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Further, there was a manufacturing excursion which led to approximately 4% of production between June 2008 and June 2009 being affected, which would result in modules experiencing a permanent power loss. First Solar said that affected modules had already been replaced in many instances and that the replacement program went beyond the normal warranty conditions.
Executives said that approximately 30MW equivalent of modules had been identified as faulty and would cost approximately US$23 million to replace.
The cost-per-watt declines were said to have been achieved by higher throughput of manufacturing lines as well as higher conversion efficiencies and lower material costs.
However, First Solar said that demand continued to exceed supply in 2010 and that it would continue price declines to drive sell-through in the market and keep 2011 factory utilization high.
The pushout of U.S. utility-scale projects to meet demand in key markets such as Germany would continue in 2010. Should demand slow in Germany and Italy on the back of FiT cuts, the utility market would fill the gap, the company said.
Capital spending was guided as between US$575 million and US$625 million in 2010.
The company also announced a few details concerning its new CdTe Series 3 modules. First Solar said that the new series had higher efficiencies than the previous Series 2 modules. The new design also enabled up to 50% more modules per string and has a new locking connector with tactile feedback.
