How Is First Solar’s Series 6 Transition Progressing?

First Solar (NASDAQ:FSLR) is getting ready to roll out its Series 6 modules next year. The panels are viewed as one of First Solar’s most important product launches in years, as they allow it to compete more directly with silicon-based panels in terms of both conversion efficiency as well as total rated power. In this note, we take a look at why Series 6 is important to the company and where it currently stands with its transition.

We have a $49 price estimate for First Solar, which is roughly in line with the current market price.

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Why Series 6 Is Important To First Solar 

First Solar current Series 4 modules offer a peak power rating of roughly 120 watts (W) per module, putting them at a disadvantage relative to many multi c-Si panels which have maximum power output of upwards of 315 W. This means that a greater number of First Solar panels are required for a given system size, translating into higher balance of systems (BoS) costs per watt compared to systems which use silicon panels. This has proved a handicap for First Solar, as BoS costs are becoming a prominent part of a solar system’s overall cost, as they include labor and mounting – that do not necessarily sees cost reductions like solar panels. First Solar expects its Series 6 to be rated at upwards of 420 W per panel. Series 6 also utilizes a new production methodology that employs a larger glass size and also has significantly lower capital expenditures (roughly 40% lower per watt of manufacturing capacity).

Production Ramp And Expected Efficiencies

First Solar is expected to invest a total of about $1 billion into the Series 6 transition, building the modules in three regions, including Malaysia, Ohio and a facility in Vietnam, that it had previously built but never operated.  Over the last quarter, First Solar noted that the first of its Series 6 equipment has arrived at its factory in Ohio, with tools for Malaysia expected to arrive by the end of this year. The tooling of the plant in Vietnam will be slower, as the company expects the key milestones on the unit to be achieved about one quarter after the Malaysian unit. The company plans to ramp up Series 6 production to about 1 GW next year, with capacity improving up to 3.5 GW during 2019. The company expects to exit 2019 with just under 4 GW of Series 6 capacity.

While First Solar says that the efficiency of its Series 6 modules will likely stand at over 18% at launch, efficiencies could improve to over 19% in the next few years, as the company executes on its technology roadmap. We could see stronger improvements in the long run, as First Solar’s Cd-Te technology has a higher theoretical upper limit for conversion efficiencies compared to silicon-based panels. Moreover, First Solar has a solid track record of translating record cell and record module efficiencies into production. It’s current record cell efficiency standard currently stands at 22.1%.

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