April 9 (Bloomberg) -- First Solar Inc., the biggest maker of thin-film solar modules, said efficiency improvements are accelerating, which will cut production costs and help it compete with rivals that use polysilicon.
The company’s newest panels can convert 16.1 percent of the energy in sunlight into electricity, a record for cadmium-telluride technology, and may reach 18 percent in 2016, Chief Technology Officer Raffi Garabedian said today during an analyst day presentation.
That will help drive down production costs to less than 40 cents a watt by 2017, from 68 cents in the fourth quarter. Improved technology will help First Solar compete against the dominant Chinese manufacturers of polysilicon panels, said Chief Executive Officer Jim Hughes. He expects about a third of revenue to come from panel sales, and the rest from building and selling solar farms.
“We’re refocusing on research and development,” Hughes said on the call. “First Solar won’t hide behind the systems business.”
The efficiency results were confirmed by the U.S. Energy Department’s National Renewable Energy Laboratory, Tempe, Arizona-based First Solar said today in a statement. The panels aren’t in commercial production yet.
Yingli Green Energy Holding Co., the largest panel maker based on 2012 shipments, had production costs of about 62 cents a watt at the end of last year, and expects that to decline 10 cents to 12 cents this year.
First Solar has about $8 billion worth of contracts to build power plant systems with its panels, insulating the company from the price cuts that have bankrupted solar manufacturers from Germany to the U.S. and led China’s Suntech Power Holdings Co. to default on some debt.
First Solar rose 6.6 percent to $28.83 at 12:24 p.m. in New York. The shares have slumped 6.6 percent this year.
(The analyst meeting began at 9 a.m. in New York and will continue until 4 p.m. To listen to a webcast, go to the company’s site at http://investor.firstsolar.com/events.cfm)
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