First Solar said today that it will build new plants for producing cadmium telluride solar modules in the U.S. and Vietnam that should become operational in 2012.

The two plants, combined with previously announced factory expansions in the U.S., Germany and France, will bring the company's total capacity to 2.7 gigawatts by 2012. That nearly doubles the factory capacity of 1.4 gigawatts this year. In July, the company, before these new plants were announced, predicted capacity would be 2.2 gigawatts in 2012.

If there was a Tiger Beat magazine for the solar industry, First Solar surely would be on every cover. The company regularly exceeds financial and sales expectations. In the second quarter, it said that demand exceeded supply. It has a 2.2-gigawatt pipeline in North America alone. Moreover, it has relentlessly dropped the price of its modules while inching up the efficiency. First Solar in August said it was making modules for 76 cents a watt and had boosted efficiency to 11.2 percent.

(That's a First Solar employee in Germany in the photo. Count all the fingers -- none lost to machinery yet.)

A few storm clouds have appeared on the horizon, however. General Electric at Solar Power International reaffirmed its commitment to come out with cadmium telluride solar panels next year. GE promises that the panels, developed in conjunction with PrimeStar, will be top-of-class. GE represents the first large company to seriously take on First Solar in cad tel. Meanwhile, Damroder Reddy, CEO of cad tel producer Solexant, told us at the show that cadmium telluride can only likely hit efficiencies of 12 percent to 13 percent. Concentrators also don't dovetail well with cad tel. As a result, First Solar and these other companies might be approaching a wall. Efficiency isn't everything, but it is a knob manufacturers can hit to goose their price/performance metrics. Losing one trick in the playbook always hurts.

Reddy says his company will be able to produce modules for nearly 50 cents a watt when they come out in volume production, which won't occur for a few years. (First Solar, true to its hermetic nature, didn't show at Solar Power International.)