One question will be the price at which First Solar can sell out all of its production. The company noted that in the fourth quarter it had moved earlier than expected to 2011 pricing (pricing that would take into account a January cut in Germany's feed-in tariff). "It's all going to be about pricing and what happens in the core module business," said Wedbush Securities analyst Christine Hersey. The Wedbush analyst added that the move-up of 2011 pricing by First Solar to the fourth quarter of 2010 is a trend to watch in terms of First Solar's thin film technology competing against higher efficiency crystalline silicon modules. "There should be an ASP penalty for a lower efficient module, but that gap between thin film and crystalline silicon had disappeared. Now that demand in Germany has slowed, and more supply is coming on, maybe the natural gap is returning," Hersey opined.
The outlook presented by First Solar for 2011 still shows a heavy geographic tilt to Europe: 10% to 15% in France (where significant changes to solar subsidies are coming); 15% to 20% in Italy; and 30% to 35% in Germany. At the low-end of the First Solar geographic targets, it is 55% reliant on European markets but at the high-end as much as 70% reliant on sales to Europe.
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