Is Yingli's Cost Closing In On First Solar? Nope

Yingli Green Energy (YGE) might be able to cut its costs to the point where it will be in the same league as First Solar according a note from Barclay's analyst, Vishal Shah (via PV Tech).

Shah says that once the Chinese solar company burns through its older high cost polysilicon inventory, and takes advantage of the lower cost polysilicon on the market, it could lower production costs to $1.30 per watt. Shah´s calculations include an $85 kg per watt price and a $.85 per watt non-silicon cost.

That would still put Yingli 32 cents short of First Solar who now manufactures its panels for $.98 per watt. By the time Yingli gets to $1.30, First Solar will probably be even cheaper.

First Solar is increasing its efficiency regularly, which makes the argument in favor of polysilicon over cadmium telluride (First Solar's technology) less relevant. Also, First Solar appears to be one of the best run companies in the world. While everyone else is suffering setbacks in the solar industry, First Solar keeps on reporting big revenue and profit numbers.

This all comes up because Yingli announced a three year deal with AES Solar to be an exclusive supplier of polysilicon panels on Friday. A year ago, First Solar announced a similar deal. Shah doesn´t expect an outpouring of orders from AES immediately, but he does think that in the long term the cost competition could help Yingli snatch some business away from First Solar. We have our doubts.