Miasolé plans to ship its first commercial thin-filmsolarpanels to customers by the end of this year, CEO Joseph Laia told Greentech Media this week.

After contending with layoffs, an executive change and months of rumors that the thin-film developer had been suffering technical setbacks, usually tight-lipped Laia said Miasolé has improved its efficiency and is ready to grow.

The company, which has the capacity to produce 40 megawatts per year from its pilot line and two production lines at its headquarters in Santa Clara, Calif., expects to expand its annual California capacity to 120 megawatts next year, Laia said. He added the company will be building a larger second factory in the western United States next year and that it should be up and running by 2010.

But the company isn’t exactly known for keeping its promises.

Miasolé previously said it planned to reach 50 megawatts of capacity by 2007 and 200 megawatts by 2008 (see The Energy Blog, Red Herring and CNET).

What’s different? For one thing, Laia himself, who took over after former CEO David Pearce stepped down from the top spot in September and left the company in December.

Laia said that when he came on board the company was producing cells with an average 5 percent efficiency, meaning the cells converted about 5 percent of the sunlight that hit them into electricity.

That's a far cry from the conversion efficiency of thin-film darling First Solar (NSDQ: FSLR), which is the world’s largest thin-film company (see Wall Street's Love Affair with First Solar Continues and Thin Films Lead U.S. Solar Production).

First Solar, which makes cadmium-telluride films, reached an average cell efficiency of 10.6 percent at the end of the fourth quarter, Jesse Pichel, a senior research analyst at Piper Jaffray, wrote in a research note.

Laia said that since he took the helm, Miasolé has been working to increase cell efficiency and tighten up the manufacturing process to reduce excess waste. And, according to him, it’s worked: Miasolé is producing panels with 9 to 10 percent efficiency, he said.

Now, Laia said, Miasolé isn’t having more technological problems than anyone else.

"This isn't easy," he said about going after high efficiency while keeping costs under control. "I don't think anybody has figured it out because you can't buy a good [copper-indium-gallium-selenide] module at a low price from anybody in the world."

Thin-film solar cells use little or no silicon, the costliest part of most solar cells. Advocates claim the technology can potentially lower costs beyond that of silicon-based cells.

Miasolé makes copper-indium-gallium-diselenide films, also known as CIGS. In laboratory tests, CIGS films have reached the highest efficiency, compared with other thin films. The approach also is being used by HelioVolt, Nanosolar, Global Solar and others.

But so far, none of the CIGS companies has managed to reach mass-market production – or to beat First Solar’s costs or efficiency outside of the lab.

And Miasolé doesn’t expect to do that right away, either.

Tom Hecht, Miasolé's director of sales and marketing, said the company will be producing panels at a higher cost than that of First Solar at first, but eventually expects to become competitive.

First Solar reported a manufacturing cost of $1.12 per watt in the fourth quarter of last year.

With First Solar dominating the thin-film market and churning out impressive profits to boot, the heat is on for companies like Miasolé to bring their products to the market fast.

Brian Yerger, a research analyst with Jesup & Lamont, said the market is ripe for thin-film solar.

If a company can reach high efficiencies at the right price point, "then you have a ready-made market where you can sell all you can produce," he said.

Paul Maycock, president of solar-electric consulting and research firm Photovoltaic Energy Systems, said that CIGS-based solar films, such as Miasolé’s, should theoretically be more efficient than cadmium-telluride films such as First Solar’s.

In labs, CIGS films have reached efficiencies of nearly 20 percent, while cadmium-telluride films have topped out at about 16.5 percent.

"We have been hearing from all the CIGS (companies) and nobody is shipping yet in any quantity," he said. "It's very easy to set goals. But the proof will be in the eating."