Accompanying the news that SunPower is increasing solar cell capacity by 150 percent this year was the mention in its first-quarter financial results that it expects to meet its goal of 30 percent gross margins by the end of 2008 on the back of lower polysilicon prices, higher cell efficiency and thinner wafers.
SunPower stated that its conversion from 165 micron to 145 micron wafers remains on schedule and it expects 100 percent of its solar cell lines to be using the thinner wafers by the end of 2008.
“We expect SunPower’s silicon supply costs to decline by approximately 10 percent during 2008 compared to 2007,” noted Tom Werner, SunPower’s CEO. “This cost improvement will amplify our silicon utilization benefits achieved through higher cell efficiency and thinner wafers. We are on track to achieve our planned improvements in our cost structure, and therefore we expect to reach our target financial model of 30 percent gross margin, 10 percent operating expenses and 20 percent operating margin, on a non-GAAP basis, no later than the first quarter of 2009. We are also on track to realize our mission of reducing installed systems cost by 50 percent by 2012.”
With the expected decline in polysilicon prices as production ramps at both major and start-up producers, SunPower expects price declines of 10 percent by the end of the year, helping it meet gross margin targets.