First Solar in its Second Quarter 2011 Earnings Conference Call said that the Q2 net sales was about $533 million, about 6% lower than last quarter, primarily due to lower average selling prices. Solar PV’ policy uncertainties in Italy, Germany and France adversely impacted demand in the second quarter.
Module manufacturing and cost per watt was $0.75, was flat quarter-over-quarter. The benefit of the modules from low-cost manufacturing sites was offset by FX, lower line throughput, higher spending and factory ramp costs. Core costs, which excluded the ramp penalty and stock-based compensation, was $0.73 per watt.The company also announced that their Malaysian plants have achieved a new core cost milestone of $0.69 per watt.
Annual capacity per line decreased by 2 megawatts quarter-over-quarter to 62.1-megawatt per line. Line throughput and cost per watt were both impacted this quarter as we decided to take advantage of softer industry demand to schedule downtime and begin to implement conversion efficiency improvements which we expect will have a meaningful impact by the end of the year.
The company also reached a milestone with the standard utility-scale Balance of Systems by achieving a cost level of $0.99 per watt. BoS is down 29% from the second quarter of 2009. The company has a 2014 target for standard BoS of $0.91 to $0.98 per watt and can improve further as their planned module efficiencies increase to 13.5% to 14.5% by the end of 2014.
The company has made significant progress in lowering total systems costs by 30% in 3 years. If they can reduce that by another 19%, they believe that turnkey utility-scale systems that generate power at an LCOE of $0.10 to $0.12 per kilowatt hour in high-radiant zones like the U.S. Southwest, India, China, Australia, the Middle East, Spain and Italy. This they believe will drive their participation in the peak electricity generation market.
North American business has grown from 17% to 25% of megawatt shift and is expected to be the #1 market in 2012. In India, supportive policies and new local partners are driving strong growth, and the company expect India to account for more than 10% of our megawatts this year.
North American pipeline and new markets like India are helping to offset European market uncertainties, and both are expected to be multi-gigawatt, sustainable markets. In the second quarter, North America and India combined represented almost 50% of revenues.
The 2011 planned shipments in India have now grown to more than 200 megawatts, which is up from 100 megawatts in Q1 and 10 megawatts sold in 2010. The company recently signed 4 new module customers in India and have contracted more than 250 megawatts year-to-date for deliveries in 2011 and into 2012.