Good afternoon, everyone, and welcome to First Solar's first quarter 2019 earnings call. This call is being webcast live on the Investors section of First Solar's website at firstsolar.com. At this time, all participants are in a listen-only mode. As a reminder, today's call is being recorded. I would now like to turn the call over to Adriana DeFranco from First Solar Investor Relations. Ms. DeFranco, you may begin.
Thank you. Good afternoon, everyone, and thank you for joining us. Today, the company issued a press release announcing its first quarter 2019 financial results. A copy of the press release and associated presentation are available on First Solar's website at investor.firstsolar.com. With me today are Mark Widmar, Chief Executive Officer, and Alexander Bradley, Chief Financial Officer. Mark will begin by providing a business and technology update. Alex will discuss our financial results for the quarter and provide updated guidance for 2019. Following their remarks, we will open the call for questions. Please note this call will include forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from management's current expectations. We encourage you to review the safe harbor statements contained in today's press release and presentation for a more complete description.
It is now my pleasure to introduce Mark Widmar, Chief Executive Officer. Mark?
Thanks, Adriana. Good afternoon, and thank you for joining us today. I would like to begin by briefly discussing our EPS results for Q1. As we emphasized on our February earnings call, we expected that the combination of lower quarterly Series 6 sales and the higher Series 6 cost per watt relative to the full-year average, as well as the timing of both ramp and start-up charges, and the timing of project development sales, would have the most acute impact to earnings in the first quarter. Our EPS results for the quarter was, in part, driven by these factors. The first quarter was also adversely impacted by some unanticipated non-Series 6-related costs. Alex will go into more detail, one key area where we have seen significant recent challenges has been containing costs in our EPC business. These challenges include factors both external and internal to First Solar.
Externally, a tighter-than-expected construction labor market and certain equipment supply issues produced a drag on profitability of several of our systems projects. We also encountered certain weather delays for which relief was not available under the EPC contract, which in turn put pressure on required milestones and other completion dates, and correspondingly, increased costs. From an internal perspective, our recent record of project cost management, including subcontractor and vendor cost management, failed to meet our expectations. Our EPC capability delivers strategic value to the company. Following a recent evaluation of these issues, we determined that a restructuring of the EPC organization was prudent given these issues. Accordingly, we have installed new leadership of the EPC organization, merging our energy systems function with the engineering procurement and construction group.
In addition, we are reviewing certain supplier and subcontractor arrangements and potential remedies with a view to addressing certain of these costs. Turning briefly to the market, catalysts driving increased PV penetration continue to point to a strong global demand in 2019 and momentum building thereafter. For example, in the U.S., there's a growing impetus to decarbonize electricity. In the past month, Washington State joined California, New Mexico, Hawaii, Puerto Rico, and Washington, D.C., in enacting legislation that mandates 100% clean electricity standard. Additionally, over a dozen other states have either put in place non-binding goals, have introduced or are planning to introduce legislation with varying levels of clean energy commitments, or are committing to studying clean alternatives to their power generation portfolios. Corporate buyers are also increasingly looking for ways to decarbonize their electricity.
This is reflected in the fast-changing PPA landscape in the United States, which is seeing an evolution in buyer types and transaction structures. We see a significant rise in corporate and commercial industrial PPA structures, with large technology companies dominating the market, but with growing interest from other sectors such as healthcare, finance, and even oil and gas. As part of our focus to accelerate growth in this segment, First Solar has joined the board of the Renewable Energy Buyers Alliance, which has committed to establishing a clear path to its members to procure zero-carbon electricity. This alliance's goal is to catalyze 60 gigawatts of new renewable energy for its members by 2025. Internationally, Europe has continued on its growth trajectory, with 2019 potentially being a record year for PV installations.
Additionally, this year, First Solar celebrates 15 years in Europe with approximately 5 gigawatts of installed capacity across the region. This year, we expect European growth to be largely powered by the resurgence of the utility scale market in Spain. Driven by economics and favorable policy, Spain is expected to add significant new capacity over the next several years. Additionally, France continues to procure utility scale solar as part of its CRE program. Globally, all indicators point to growth underpinned by a combination of competitive economics of solar and a desire to decarbonize electricity grids. Starting on slide four, I'll provide an update on our Series 6 capacity rollout. As a reminder, we began production of our first Series 6 factory in April of 2018. Since then, we started production at three additional factories.
Reflecting over this relatively short period of approximately one year and the significant progress we have made, we are pleased with where we are at Series 6 in terms of schedule, performance, and cost. Since the February earnings call, we have seen significant operational improvements across our Series 6 factory. When comparing the performance of the month of February, which includes the first full month of our production of our second Vietnam factory, to the performance of the month of April, meaningful improvements can be seen despite certain planned downtime during the period. Megawatts produced per day is up 34%. Capacity utilization has increased 21 percentage points. Adjusted for planned downtime, the April fleet capacity utilization was 90%. We expect higher than normal planned downtime to continue over the next couple of quarters as we continue to operationalize the full entitlement of our factories.
Production yield is up two percentage points to approximately 90%. The average watt per module has increased slightly more than one bin or six watts. Finally, the percentage point of modules with anti-reflective coating has increased by 15 percentage points. Another noteworthy highlight relative to our Series 6 production expansion is the success we have experienced ramping our second Vietnam factory. The ramp has been accelerated relative to previous factories by applying accumulated learnings, including starting production with an improved module framing tool. This benefit can be seen when comparing the initial three months of production of our most recent Vietnam factory to our first Series 6 factory in Ohio. Capacity utilization is 33 percentage points higher. Production yield is 32 percentage points higher.
Average watts are up 19 watts or essentially four bins, and the ARC penetration is 48 percentage points higher, leading to an equivalent watts produced being 125% higher. The progress we have made ramping our factories has been a key contributor in enabling us to achieve our first quarter Series 6 cost per watt objective. While this is a significant accomplishment, there is a tremendous amount of work still in front of us to achieve our cost per watt roadmap for the year. As we noted in our February earnings call, our expected Series 6 cost per watt will drop approximately 30% from Q1 to Q4. These significant accomplishments can be credited to the outstanding work of our engineering and manufacturing associates. Construction is continuing on our second Series 6 factory in Ohio.
As announced previously, we expect to start production in early 2020. Construction is thus far on track to our schedule, with the first tools scheduled to be installed by the end of Q2. Once completed, we will have five factories with an aggregate annual Series 6 capacity of 5.4 gigawatts, an impressive accomplishment since announcing the transition to Series 6 in November of 2016. We continue to be encouraged by the progress we have made over the last year. As noted previously, we plan for full year production of between 5.2 and 5.5 gigawatts. As a reminder, this targeted production includes approximately two gigawatts of Series 4 modules. In order to meet these production commitments, we continue to roll out tool upgrades and optimize the production line throughput across the various sites.
This is a dynamic process that continues to incorporate learnings from each of the factories we have ramped and is moving according to schedule. Turning to slide five, I'll next discuss our bookings activity since the last earnings call. In total, our net bookings since the last earnings call were 1.1 gigawatts. After accounting for shipments of approximately 900 megawatts during the first quarter, our expected future shipments are 12.2 gigawatts. Our most recent bookings are across multiple customers and include a limited volume of Series 4 for delivery at the end of 2019. The remaining Series 6 deliveries are split evenly between 2020 and 2021. In terms of geography, approximately 900 megawatts of the 1.1 gigawatts is for delivery to the U.S., with the remaining 200 megawatts flexible across the U.S. and certain international markets.
With these recent bookings, we have now added 2.3 gigawatts to the backlog since the beginning of the year. We are pleased with this momentum to date and have increased confidence in exceeding our targeted one-to-one book-to-ship ratio in 2019. As we mentioned on our last earnings call, we are largely sold out through the end of 2020. With the current bookings, now 50% of the anticipated Q1 2021 supply has been booked. As a reminder, given the time frame for which we now have available product, we may see future bookings in 2019 to be weighted towards the back end of the year. Slide six provides an updated view on our mid to late-stage bookings opportunity, which now totals 6.6 gigawatts DC, a decrease of approximately 0.7 gigawatts from the prior quarter.
When factoring in the bookings for the quarter, approximately 0.3 of which were included in the opportunities in the prior quarter, our mid to late-stage pipeline declined by 0.4 gigawatts DC. As a reminder, our mid to late-stage pipeline is reflective of those opportunities we feel could book within the next 12 months and is a subset of a much larger pipeline of opportunities which totals approximately 12 gigawatts. This includes approximately two gigawatts of opportunities in 2019 and 2020, which will provide demand resiliency to our near-term production, while the remaining approximately 10 gigawatts of demand would be for module deliveries in 2021 and beyond. In terms of geographical breakdown of the mid to late-stage pipeline, North America remains the region with the largest number of opportunities at 3.9 gigawatts DC.
Europe represents approximately two gigawatts, driven largely by resurgent markets in France and Spain, with the remainder being across the Asia-Pacific region. In terms of segment mix, our mid to late-stage pipeline includes approximately 900 megawatts of systems opportunities across the U.S. and Japan, with the remainder being module-only sales. I'll now turn the call over to Alex, who will provide more detail on our first quarter financial results and discuss updated guidance for 2019.
Thanks, Mark. Turning to slide eight, I will start by covering the income statement highlights for the first quarter. Net sales in Q1 were $532 million, a decrease of $159 million compared to the prior quarter. The lower net sales were primarily a result of lower systems projects revenue in the U.S. and Japan, partially offset by higher module segment revenue. As a percentage of total quarterly net sales, our systems revenue in Q1 was 63%, as compared to 83% in Q4 of 2018. Gross margin was breakeven in Q1 compared to 14% in the fourth quarter of 2018. The systems segment gross margin was 8% in the first quarter, and the module segment gross margin was negative 13%.
As a reminder, module segment cost of sales is comprised of all third-party module costs of sale, as well as Series 6 ramp-related costs, which as Mark mentioned earlier, are expected to be felt most acutely during the first half of the year. We experienced ramp-related charges of $36 million in the first quarter, approximately 70% of the midpoint forecast for the full year. The systems segment gross margin was impacted by $35 million related to the EPC business. This includes approximately $20 million related to our projects for Tampa Electric, which were built with our Series 4 product. Challenges of these projects included tight construction schedules, labor shortages, non-force majeure weather-related work stoppages, a failure of a high voltage transformer factory acceptance test, the financial distress of a major subcontractor, and certain rework.
This led to higher-than-projected costs and the incurrence of liquidated damages for failure to meet certain milestones. We had approximately $5 million of impact at our PV project from the inclusion of lower bin Series 6 modules, a consequence of the earlier-than-expected start of our second Vietnam factory. Products initially produced in January was held pending release through our quality review process. This fully functional but lower bin non-ARC product was used in our systems business as an alternative to scrapping it and incurring additional start-up expense. Whilst this increased costs, these are more than outweighed by the strategic value of having placed the second Vietnam factory online earlier than previously forecast, providing optionality in terms of WIP sharing across factories, as well as the ability to run more engineering test articles at our Perrysburg site over the course of the year.
The remaining approximately $10 million impact gross margin was across our other projects in construction and was a result of greater-than-projected balance of systems costs related to the installation of low-bin modules, higher-than-forecast labor costs, and certain project-specific construction costs. Operating expenses were $77 million in the first quarter, a decrease of $10 million compared to Q4 of 2018. This included a reduction of $5 million in core SG&A and R&D spending and a $5 million reduction in plant start-up expense, which decreased from $15 million in Q4 2018 to $10 million in Q1. Given the anticipated start-up timing of our second factory in Perrysburg, we expect start-up costs to increase each quarter over the remainder of the year. We had an operating loss of $77 million the first quarter compared to an operating profit of $11 million the prior quarter.
The reduction in operating income was a result of lower systems revenue and the higher EPC and ramp costs mentioned previously. Other income was $4 million in the first quarter, primarily from the gain on sale of certain restricted investments associated with our module collection and recycling program, partially offset by the impairment of a strategic investment into perovskite technology. Despite providing us with valuable insights into the development of perovskites, the investment was unable to hit certain internal milestones required for continued investment, resulting in an impairment of $5 million in the quarter. We took a mark-to-market charge of $5 million related to the fair value of certain interest rate swap contracts for some of our project assets in Japan and Australia.
This is a timing impact based on movement of interest rates within the quarter. We expect to see a corresponding increase in project value recorded at the time of sale. We recorded a tax benefit of $1 million in the first quarter compared to a tax benefit of $4 million in Q4 of 2018. A combination of the aforementioned items led to a first quarter loss per share of $0.64 compared to earnings per share of $0.49 in the fourth quarter of 2018. To summarize the key P&L themes from the quarter, we had a mix of expected and unexpected. As expected, we had our lowest revenue quarter for the year, our quarter with the lowest percentage of Series 6 sales relative to total module sales, the highest Series 6 cost per watt relative to the full-year average, and the highest quarterly combined ramp-related and start-up expense.
Not anticipated were the higher-than-forecast ramp and EPC costs, the perovskite investment impairment, and interest rate-related mark-to-market swap cost impacts referenced above. I'll next turn to slide nine to discuss select balance sheet items and summary cash flow information. Our cash, restricted cash, and marketable securities balance ended the quarter at $2.3 billion, a decrease of approximately $400 million from the prior quarter. Our net cash position decreased by approximately $500 million to $1.7 billion. The decrease in our cash balance is primarily related to capital investments in Series 6 manufacturing capacity, Series 6 manufacturing ramp and associated working capital and inventory costs, and the timing of cash receipts from certain systems project sales. Total debt at the end of the first quarter was $571 million, compared to $467 million at the end of Q4 of 2018. Debt issuance was primarily associated with project development in Japan.
As a reminder, all our outstanding debt continues to be project-related and will come off our balance sheet when the projects are sold. Net working capital in Q1, which includes the change in non-current project assets and excludes cash and marketable securities, increased by $272 million versus the prior quarter. Change was primarily due to an increase in accounts receivable on inventories. Cash flows used in operations were $303 million the first quarter, primarily driven by the timing of systems, business spend, and cash receipts, as well as increased spend ramping the Series 6 module business. Finally, capital expenditures were $149 million in the first quarter compared to $129 million in the fourth quarter of 2018, as we continued Series 6 capacity expansion. Continuing on to slide 10, I'll next discuss the updated assumptions associated with our 2019 guidance.
Firstly, our guidance continues to assume a back-ended Series 6 module sale profile with approximately 75% of Series 6 third-party module sales occurring in the second half of the year, as well as a steep Series 6 cost reduction profile over the year with Q1 and Q2 cost per watt approximately 30% and 5% respectively above the full-year average. Secondly, we continue to see ramp-related and start-up charges weighted approximately 60% for the first half of the year. Thirdly, we assume the majority of system sales, both in the U.S. and internationally, will take place in the second half of the year. With regards to our U.S. assets currently for sale in 2019, we continue to assume a full sale of these projects in 2019, with the majority of revenue being recognized by year-end.
As highlighted in our last earnings call, there remains uncertainty around both timing and value, especially related to assets with offtake agreements with SCE, given the circumstances surrounding the bankruptcy of PG&E. Recent developments in California have been positive. We are also pleased with the progress we've made in the sale process. Given the continuing uncertainty in the California market, should the market not reflect what we believe to be appropriate risk profiles and values for these assets, we would look to finance the assets and hold them on balance sheets through the period of uncertainty rather than selling at prices below what we believe to be fair value. Whilst unlikely, should this change in sale timing occur, it could result in full-year EPS approximately $0.50 below the low end of the current guidance range.
Lastly, in addition, as highlighted in our December 2018 guidance call, our guidance continues to not take into account any potential impact of the continued class action lawsuit filed in 2012 or any resolution of that lawsuit. With these factors in mind, we are updating our 2019 guidance as follows. We are raising our net sales forecast to a revised range of $3.5 billion-$3.7 billion. This $250 million increase above our prior net sales guidance relates to both the modules and systems segments. With respect to the module segment, while total expected shipments for the year are unchanged, the earlier than anticipated transfer of control of the modules sold results in revenue being recognized in the fourth quarter of 2019, was otherwise anticipated to be recognized in the next fiscal year.
With respect to the systems segment, we are projecting the earlier sale of certain development assets in the U.S. and Japan, driven by the opportunity to optimize exit valuations for these projects and reduce risk across the entirety of the global development portfolio. Our expected growth margin has been lowered by 150 basis points to a revised range of 18%-19%. The reduction is due to the previously discussed higher than projected EPC costs incurred in Q1, as well as an increase in projected Series 6 ramp-related costs. The operating expense forecast has been lowered by $5 million to a revised range of $370 million-$390 million as a result of decreased plant start-up expense, which is now forecast to be $70 million-$80 million. Operating income and earnings per share guidance remain unchanged.
Our net cash forecast has been increased by $100 million to $1.7 billion-$1.9 billion as a function of the timing of project sales and cash receipts, as well as increased prepayments for third-party modules being sold to enable ITC safe harbor benefits. CapEx and module shipment guidance numbers also remain unchanged. As discussed previously, we expect the majority of earnings to be in the second half of the year, with Q2 close to breakeven and potentially in a loss position. However, the timing of project sales between quarters can have a material impact on the quarterly earnings profile. Finally, I'll summarize the key messages from our call today on slide 11. Firstly, we continue to be pleased with our bookings momentum. With year-to-date 2019 net bookings of approximately 2.3 gigawatts, we continue to strengthen our contracted pipeline.
Secondly, we continue to make good progress on our Series 6 capacity roadmap and remain on track for our combined Series 4 and Series 6 production target of 5.2-5.5 gigawatts. Lastly, we've increased our full-year revenue and cash guidance and maintained our full-year EPS range. With that, we conclude our prepared remarks and open the call for questions. Operator?
At this time, I would like to remind everyone, in order to ask a question, press star then the number one on your telephone keypad. We'll pause for just a moment to compile the Q&A roster. Your first question comes from Ben Kallo with Baird. Your line is open.
Hey, thanks for taking my questions. First, could you guys just talk about on the booking side, I think bookings were down sequentially. Was that just on the EPC side? Then could you talk about pricing on the new bookings there to the extent you can, how they compare with maybe the last quarter, when you talked to us?
Ben, if you look at the bookings for the quarter is 1.1 gigawatts. Year-to-date bookings, 2.3. All right?
Again, the 1.1 that we're referencing is just from the February earnings call. If you look at it, for a two-month period, we booked 1.1 gigawatts. For the first two months of the year, we booked a 1.3 kind of number, 1.2. They're very comparable. If you look at the momentum, which we'd say if we carry that forward through the balance of the year, we'll be booking somewhere close to seven gigawatts. I don't see really any slowdown in the momentum of bookings. I feel it's a robust number to start off the year. As we indicated, the start of the year is positioning us to exceed our targeted one-to-one book-to-bill ratio. That would point us to a number, six gigawatts plus.
Trend's pointing us to north of that number, which I think is a positive indicator of what's going on and continued momentum in the business. ASPs, I continue to be extremely pleased with ASPs. The profile of the bookings, the 1.1 relative to what we booked in the first two months of the year. ASPs are steady. They still have a free handle type of ASP that we've referenced before. I know there's some indications in the market of pricing being much more aggressive than that. We continue to be able to be patient given that we've sold out through the end of 2020, and now we're effectively 50% sold for the first quarter of 2021. We can be selective. We can engage with customers. We can make decisions on where to walk away.
We're not being held by volume overhang that we haven't already been committed to from a customer. That helps us tremendously in how we're engaging the market. Actually, I've been very pleased with the corresponding pricing that we're realizing.
Your next question comes from Philip Shen with Roth Capital Partners. Your line is open.
Hey, guys. Thanks for the questions. First is around shipments of Series 6 modules. Can you share how many megawatts you shipped in Q1, and what that ramp rate might be for Q2? Secondarily, some of our recent checks suggest that you may be focusing some resources on a three- to five-year kind of cost-out plan and CapEx reduction plan. Is there any truth around this? Are you having people that, for example, had been otherwise focused on near-term capacity ramp-up challenges now switch over to longer-term opportunities? In other words, does this highlight potentially that you've solved a lot of your near-term issues, and you have an ability to focus on the longer-term or medium-term set of problems or cost-outs ahead? Thank you.
From a shipment standpoint, I think we indicated that we shipped about 900 megawatts for the first quarter. You can take from that that we've got 2 gigawatts of Series 4. Think of that shipment profile being relatively linear. You kind of get to a position of the shipment profile around 50/50 between the two, maybe slightly more Series 4 shipments than Series 6 shipments. The ramp profile is going to increase significantly. The forecast for the year is 5.5. We've got about 4.5 gigawatts to now ship over the remainder of the year. Again, that entire ramp is associated with Series 6. The Series 4 profile is going to be consistent across each of the remaining quarters of the year.
Phil, I guess, first off, we are very happy, and we highlight that on the call around the progress that the team has made for Series 6. We cannot take our eye off of it, though. We got to continue to stay focused from both a schedule standpoint, performance standpoint, and a cost standpoint. We haven't really come up for air yet. We're starting off this quarter very well. April's been a strong month. The first day of May has effectively been a record for us with all of our plants performing extremely well. We continue to have to take some amount of planned downtime, which that planned downtime will adversely impact utilization rates.
As we currently see it going forward, a lot of the major efforts that we needed to take planned downtime have effectively happened now through the first four months of the year. There's still efforts that will continue, but a lot of the major lifting has been done so far, at least what we currently anticipate. What I will say is that we never relax when it comes to how do we think about continuing to take more costs out. How do we think about CapEx? How do we think about throughput? How do we try to capture our current nameplate capacity of a factory is 1.2 gigawatts. We're continuing to challenge ourselves around how do we get more throughput out of every factory.
One thing that I will say in that regard, while it will be relatively small, even our second factory in Perrysburg that we'll launch will have some additional CapEx investments associated with it, relatively nominal, that will enable us to increase the throughput from that factory once it's started up, and currently anticipated to be in 2020. We'll see the success of that effort and determine how quickly we roll out across the remaining fleet. We'll also continue to challenge ourself around how do we, again, optimize throughput across every factory. The benefit by doing that is it's variable cost. It has not only impacted utilization and throughput benefits, but you're now looking at your cost per watt of that incremental throughput as being more or less variable cost and some de minimis CapEx, not an overly significant commitment for the most part.
There's tremendous leverage and value creation for us to do that. Have there been efforts where we're continuing to evolve those thoughts? Surely there are, but I don't want anyone to take from this that we are taking our eye off at all on both from a schedule performance and a cost standpoint. Still a lot of work in front of us as it relates to Series 6 and delivering against our commitments for the year.
Your next question comes from Jeff Osborne with Cowen and Company. Your line is open.
Hey, good afternoon, guys. Just one clarification and then two quick questions. Mark, I think you mentioned that the pricing of the 2.3 gigawatts in backlog, is all of that have a quote-unquote "free handle," as you said? That includes the one gigawatt for 2021-2023 that you announced last quarter?
Yeah. We're very happy with the profile of ASPs as they go across that horizon, yeah, we're seeing very good pricing from that standpoint. I think, again, when you look at the queue, if I'm not mistaken, for what truly was recognized. It'll come out tomorrow, but what's truly been recognized in the first calendar quarter, the ASP metric, I think will effectively be the same. It'll stay steady. I think it's around $0.36, something in that range, right?
Yeah. If you do the math, you'll see it stays at $0.36. If you do the comparison to last quarter, the incremental is going to show you actually booking at $0.40 a watt now. As we know, that's rounded for our gigawatts in dollars billion. Got to take that with a pinch of salt. If you look at it today, yeah, you're going to still see the backlog and the module and bookings being averaged at $0.36.
Your next question comes from Brian Lee with Goldman Sachs. Your line is open.
Hey, guys. Thanks for taking the questions. I'll try to get two in here. First off, given the demand environment and the more stable pricing trends as of late across the industry, just wondering if you can update us on your thought process around Malaysia One and converting that from Series 4 to Series 6. Second question would just be around the new gross margin guidance. Just want to make sure I understand the ins and outs of that. It implies about $50 million is coming out. Alex, you talked about $35 million of EPC and then the incremental $10 million in ramp costs. Are all of the gross margin headwinds relative to the original guidance concentrated here in Q1 results, or am I being too cute there? Are there more cost impacts as you move through the year? Thanks, guys.
Yeah, I'll hit the gross margin quickly. Yeah, you're generally right that you're seeing the impacts in Q1. It's about $35 million related to the EPC business and that $10 million of ramp, five of which is true increase for the year, and five of which is you can think of a move from start-up to ramp, and you see a corresponding reduction in start-up of $5 million. That bridges you roughly from where we were to the new gross margin % guidance.
Brian, as it relates to the demand environment, again, we continue to be very happy with the demand that we're seeing here in the U.S., but globally as well. We're happy with our pipeline. One of the things we tried to bring into the mix this time was not just the mid to late-stage pipeline, but we brought the total pipeline in and highlighted that we have about 10 gigawatts of opportunities in different phases that are for 2021 and beyond. I'm very encouraged with the team and our ability to continue to engage with customers and find those opportunities. Our hit rate's been very good, and I'm happy with that. As it relates to our first factory, actually in Kulim, which is currently non-committed to our capacity plan.
Our capacity roadmap includes about 6.6 gigawatts of Series 6, which would have two factories in Malaysia, two in Vietnam, and two in the U.S. We haven't made a commitment yet on that last factory. There's a handful of things that will weigh into our decision-making. One of them is still momentum around safe harbor and how long do we run Series 4. We could potentially even run Series 4 into Q1 of next year because as you know, the safe harbor window allows for deliveries that go through April of 2020. That could be a decision-maker that will influence our timing and how we think through a conversion to the extent there's a conversion. The other one that I think is important, though, is just anything we do will clearly be driven by market. As we continue to build our backlog, that'll give us more confidence.
The other one is I somewhat alluded to, is what we're trying to do with our second factory in Ohio. One of the things we'd like to do is optimize the footprint to capture as much capacity out of the existing production that we have before we make additional conversions, because the CapEx per megawatt of volume is significantly lower by just debottlenecking incremental CapEx and existing capital versus a new brownfield type of conversion and entire equipment set. Obviously dealing with cost of ramping and everything else that goes along with that. There's a lot of moving pieces that will play into our mix in that regard. We'll probably have a much better sense of where we are on that last factory in Malaysia as we exit the end of this year.
We'll be probably giving a better indication of what our plan would be for that facility.
We have a follow-up question from the line of Jeff Osborne. Your line is open.
Thank you. I was just going to ask about the TECO challenges. How much of your backlog is in TECO, and are they placated with the resolution that you've had?
The impact of the last project that we have is Lake Hancock. That will be complete here as we exit this quarter. The items, the portfolio's been largely built now, constructed, issues have been countered, obviously reflected in our first quarter. Obviously, we still have some remaining work to be done to complete the last project for Tampa Electric, we're only a matter of a month or two out before that'll be completed.
Got it. Alex was very specific about Q1 and Q2 and cost of Series 6. Is there any change to that slide that you had from last quarter as it relates to the second half of the year with the declines relative to the full-year average?
Yeah. That slide generally holds. I think there was a question earlier around capacity as well. If you look at that still holds. The declining cost of the year going from 130% of the full-year average down to -10% at the end of the year, the production being about 75% weighted to the second half of the year in terms of module-only Series 6 sales still holds.
Excellent. That's all I had. Appreciate you letting me ask more. Thank you.
Your next question comes from Julien Dumoulin-Smith with Bank of America Merrill Lynch. Your line is open.
Hey, good afternoon, everyone. Wanted to follow up a little bit on the backlog question and understand a little bit how it fits with some of the safe harboring activity. To what extent is some of the incremental hedging and locking in of sales just fulfillment and extension of some of the initial safe harboring activities that you've already committed to in 2019? Or to what extent is this truly novel customers that aren't necessarily trying to lock in 2019 or falling in on some of the 2019 safe harbor stuff they've already done? Just want to understand the composition given the pricing, the discussion we've had.
Julien, there's a good portion of what we said of the 1.1 MW that was booked, 900 MW of it was in the U.S., and a couple hundred megawatts would be for projects outside of the U.S. Potentially U.S., but most likely outside. The customer has opportunities both in the U.S. and outside. They have an option to determine which projects they want to use that for. They currently are envisioning international opportunities, but that could change as well. Given that there's that much volume, there's still some element of this that is somewhat tied to a customer's view of safe harboring. In some cases, they may already have volume that's on their books that enables them to safe harbor, and now they're fulfilling kind of the period in the future which they need to complete the project.
The 5% may already be a part of a backlog portfolio that we've already booked in the prior year, and now they're saying, "Hey, well, I need to fill this opportunity out in 2021." We're engaging in the conversation for those deliveries. The way I look at it's indirectly related to safe harbor because they're anchoring in with a safe harbor opportunity that's already in the backlog. Now they're looking to complete that commitment with volumes that are going to be delivered in 2021. The pricing isn't necessarily directly related. It's not that you would say these shipments have to happen now, and therefore you're leveraging that window.
If something's being shipped between now and the safe harbor window, ASPs are very strong, and that's one reason why we're looking at potentially how long do we run Series 4, because I think you can get some economics that pencil out and make more sense there. When you go beyond that window, it's largely whether the competitive dynamics for alternative options that a customer may have for modules that could be delivered in 2021. The window can be more competitive and is more competitive than something that's going to be delivered between now and April of next year. I think there's clear indication in the market that the market is tight here in the U.S., especially to our higher efficiency, higher performing product. There's not as much mono or mono PERC in the marketplace during that horizon, you're seeing pretty firm pricing.
Unfortunately, we don't have as much supply that allows us to play in that window. When you go beyond that and you're delivering something in 2021, our technology stands on its own competitive merits relative to other options our customers may have for deliveries in 2021.
Your next question comes from Colin Rusch with Oppenheimer. Your line is open.
Thanks so much, guys. Can you talk a little bit about how far out you're booked at this point, and how much capacity you're trying to sell over the next several quarters?
What I tried to indicate a little bit is that we're 50% booked now for a targeted capacity in the first quarter of 2021. If you look at our capacity roadmap, it would basically tell you it's going to be Series 6 2021 capacity of around 6.6 gigawatts. You can kind of look at the profile of how much would be available in each quarter. We're about 50% booked against that. It's a great position to start the year off. If I look at it across the entire year, the numbers are closer to about a third. 30% or so is actually booked at this point in time. Against that, if you look at our 10 gigawatts of opportunities, 21 of them both early as well as mid to late-stage, we've got a lot of opportunity now that starts filling in that window in 2021.
Now clearly, we have some bookings, as we mentioned in our last call, that actually go out into 2023. Feel really encouraged by the opportunity set that's in front of us and continuing engagement that we're having with customers. We'll hopefully, as we progress, the only real window we have a little bit of tail at the end of 2020 to deal with on Series 6. Really the bookings as we go forward through the balance of this year, and if we achieve our one-to-one or greater than one-to-one, call it somewhere in the range of six or six and a half gigawatts, the remaining call it four gigawatts will start filling up that 2021 window.
Relative to where we are right now, if we can be successful doing that, not all that will sit directly in 2021, but we'll be able to fulfill a big portion of that supply requirement by the end of this year, if we're successful.
Our final question will come from Travis Miller with Morningstar. Your line is open.
Good afternoon. Thank you. A bit of a higher-level question here. When you look out, you talked about some of the policy momentum we've had. Certainly, we're seeing across the industry more demand from outside of policy. If you look ahead kind of two, three years, what do you see in the competitive landscape? Who do you see as competitors, and do you see enough demand out there that perhaps you can fill all capacity and have pricing power in that market?
Look, there's a tremendous amount of momentum, and there's numerous catalysts that are driving the global opportunity for PV. Demand is going to continue to grow. I don't think there's any concern. The real question is how much supply comes into the marketplace, and that's something I can't control. If you look at LONGi now, I think they're making commitments at the mono wafer level, I think going up to 65 GW by 2021, which I think the last number that I remember was something closer to 45. Those numbers, they continue to add capacity. It's hard to determine what's going to happen on the supply side.
What we do, though, and what our objective is we need to create a technology advantage and separation to have the lowest cost product in the marketplace and to have the highest energy entitlement that drives to a profit pool opportunity that we are able to capture that our competitors can't. That's what we continue to do, and we've been successful doing that in the past. The challenges in front of us were probably even greater than maybe they have been historically. That's why we made the decision to shift to Series 6, which gives us the best potential, a position of strength, and to grow this company and to capture scale and drive through and leverage against our fixed operating costs and continue to manage the business on a balanced business model with growth, liquidity, profitability.
I mean, that's the core tenets of what we try to do, and we're staying the course in that regard. As we look across the horizon, we feel very comfortable, but we know this will continue to be a very challenging and demanding market.
This concludes today's conference call. You may now disconnect.