Good afternoon, everyone, and welcome to First Solar's 4th Quarter 2020 Earnings and 2021 Guidance Call. This call is being webcast live on the Investors section of First Solar's website at investor. 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 Mitch Ennis from First Solar's Investors Relations. Mr. Ennis, you may begin.
Thank you. Good afternoon, everyone, and thank you for joining us. Today, the company issued a press release announcing its Q4 and full year 2020 financial results as well as its guidance for 2020 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 Alex Bradley, Chief Financial Officer.
Mark will begin by providing a business update. Alex will then discuss our financial results for the Q4 and full year 2020. Following these remarks, Mark will provide And our strategy outlook. Alex will then discuss our financial guidance for 2021. Following the remarks, we will open the call for questions.
Please note this call will include forward looking That involve risks and uncertainties that could cause actual results to differ materially from management's current expectations, including among other risks and uncertainties 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?
Thank you, Mitch. Good afternoon and thank you for joining us today. I would like to start by expressing my gratitude to the entire First Solar team for their hard work and perseverance throughout 2020. Although 2020 was a very challenging year, I'm proud of the way our team responded with our ongoing commitment to health and safety, delivering value to our customers and achieving our objectives in this unprecedented year. While Alex will provide a more comprehensive overview of our 2020 financial results, I would like to first note our full year EPS results of $3.73 This result came within, but towards the low end of the guidance range we provided at the time of our Q3 earnings call, largely due to the delay in the timing of our Sunstreams 2 project sale.
Despite this timing impact, continued intense competition across the crystalline TV And unforeseen challenges related to the pandemic, we are very pleased with our financial and operational results in 2020. Turning to Slide 3, I will discuss some of our key 2020 accomplishments. Firstly, our vertically integrated manufacturing process, Diversified supply chain and differentiated cad tel technology enable us to mitigate potential disruptions to our manufacturing operations from the pandemic. Accordingly, we produced 5.9 gigawatts of Series 6 and exited the year with a top production band of 4.45 watts. Secondly, driven by continued strong manufacturing execution, in Q4, we achieved a year on year 10% cost per watt reduction despite an increase in volumes sold from our higher cost Ohio facilities and an increase in sales freight costs.
Thirdly, early generation Versoacattel modules that were installed at an Enronel test Facility in 1995 reached an installed life of 25 years and demonstrated a 25 year degradation rate of 48 basis points per year. While our manufacturing processes, product design, efficiency And warranted long term denigration rates have improved significantly over the past 25 years. This result helps us understand a legacy performance baseline and provides further confidence in the superior long term durability and degradation performance of today's Series 6 product. Fourthly, we extended our limited power output warranty from 25 to 30 years for our Series 6 modules. Our Series 6 modules are now protected by the industry's first and only product warranty that specifically covers power loss from self tracking, which can have a meaningful impact on reducing systems insurance costs.
Finally, as of year end, we had shipments of 5.5 Gigawatts, bookings of 5.5 Gigawatts and contracted an additional 0.7 Gigawatts of volume that remain Subject to conditions precedent. Overall, our operational financial results in 2020 have built momentum as we move into 2021. Turning to Slide 4, I'll provide an update on our Series 6 capacity ramp and manufacturing performance. Over the course of 2020, we realized significant operational improvements. Comparing December fleet wide metrics year on year, Megawatts produced per day increased to 17.3 Megawatts, an increase of 23%.
Fleet wide capacity utilization increased to 117%, an increase of 20 percentage points. Product yield increased to 97.6 percent, an increase of 3.2 percentage points. Average watts per module increased to 4.39 watts, an increase of 9 watts. And as noted, our top production bin increased to 4.45 watts. Our manufacturing discipline and execution enable us to achieve our cost per watt reduction objective for the year.
We exited 2020 with 6.3 gigawatts of nameplate manufacturing capacity and effective January 1, we have rerated our throughput entitlement for purposes of calculating capacity utilization. Since launching Series 6 Less than 3 years ago, the factory throughput entitlement was based on the initial toolset and factory design. Given the significant improvements made over the years, we have revised our throughput entitlement to reflect the 2020 exit rate throughput. Our strong execution Continued into 2021 with improvement across all key metrics since year end. In addition to February, We commenced additional production of our 2nd Series 6 low cost factory in Malaysia.
With less than 3 weeks of production, the factory is ramping nicely with demonstrated capacity utilization reaching approximately 80%, Yields in excess of 90% and a top production bin of 4.50 watts. By the end of the year, we anticipate Our Malaysia factories will have a nameplate capacity of 3 gigawatts. Checking briefly on our systems segment. In February, we completed the sale of Our 150 Megawatt AC Sunstreams 2 project to Long Road Energy. We also signed agreements with Long Road to sell the Sunstreams 45 projects and are in late stage negotiations to sign an agreement to sell our Southern Streams III project.
As part of this portfolio acquisition, Long Road intends to utilize 1 gigawatt of Series 6, of which 7 85 megawatts will represent new bookings upon the closing of these transactions. Prior to signing the potential agreement to sell Sunstreams 3, the project PPA was terminated, which enabled Long growth to include Sunstream's 3, 4 and 5 projects in their power marketing efforts after transaction While this resulted in approximately 85 megawatt systems de booking in February, at the time of closing, we expect this opportunity will be re recognized as a new module only booking. Turning to Slide 5, I'll next discuss our most recent bookings in greater detail. Our recent bookings momentum has continued with 3.3 gigawatts of net bookings since the October earnings call. After accounting for shipments of approximately 1.8 gigawatts during the Q4, our future expected shipments, which extend into 2024, are 13.7 gigawatts.
The majority of the bookings since the prior earnings call have been 3rd party module sales, which totaled 3.3 gigawatts. We continue to see an increase in multi year module sales agreements driven by our Customers need for certainty in terms of technology they are investing in and their suppliers integrity and ethics. Representative of this, We have executed an agreement with Intercept Power to supply up to 2.4 gigawatts for deployment in projects in 20222023, of which approximately 2 gigawatts is recognized as a booking. In addition to this new booking, Intersect has the option to utilize an additional 0.4 gigawatts of module volume to support their portfolio project up to 2.4 Gigawatts. We've also secured 3 40 Megawatts for deliveries in 2023 with a leading provider of hydrogen fuel cell solutions.
A pillar of growth for the hydrogen economy is the ability to cost effectively produce Large scale green hydrogen with renewable energy sources. With an environmentally advantaged cat sales technology, we are well positioned to address this market need. Additionally, in Japan, we have continued success adding to our contracted systems backlog with the addition of 2 projects totaling 50 1 Megawatts. With new net bookings of 3.3 Gigawatts and with additional 1.4 Gigawatts of Expected bookings associated with the closing of the sales of the Sunstream's portfolio and the U. S.
Project development business, we are pleased with the robust demand for our Series Including these new bookings, volumes contracted to conditions precedent and the potential 0.4 gigawatts of incremental volume related to the Intersect transaction. We have 7.2 gigawatts of volume for potential deliveries in 2021, 5.9 gigawatts in 2022 and 2.3 gigawatts across 2023 2024. Overall, while the market remains competitive, we are very pleased with the pricing levels that we are securing to date for In an industry that sells electrons and Commitments to an environmental footprint of our technology, product circularity and supply chain transparency. We call it Responsible Solar And you can learn more about it at our corporate website. Turning to Slide 6, I'd like to discuss the strategy and advantages of this approach.
Firstly, due to our resource efficient manufacturing process, our thin film modules have the lowest carbon and water footprint available in the market today. With its advantaged position, Series 6 is the world's 1st PV product to be included in the EPAT register for sustainable products, which conforms to the NSF 457, the industry's 1st sustainability leadership standard. Designed to help institutional purchasers, EP is used by national governments, including the United States And thousands of private sector institutional purchasers worldwide as part of their sustainable procurement decisions. Secondly, we have over a decade of experience in operating high value PV recycling facilities on a global scale and remain the only solar manufacturer to have global in house recycling capabilities. This recycling process Establishing a circular economy by recovering more than 90% of the semiconductor materials for reuse in First Solar's And 90% of the glass for use in new glass container products.
Thirdly, our vertically integrated manufacturing process enhances our supply chain transparency and control over our end to end manufacturing process. We believe That our responsible solar strategy is the right way to do business and in a growing number of markets yields an economic advantage. For example, France already has ruled that favors PV modules with a low carbon footprint. Spain has also appears to be moving towards incorporating a carbon footprint metric in its renewable energy procurement program. A recent Update requires owners of renewable energy generation assets to submit carbon footprint data to the country's renewable energy registry, gathering the information needed to shape the procurement mechanism that may benefit low carbon solar.
In the United States, Vectren, A utility that services Indiana and Ohio included an environmental admission minimization objective within their integrated resource plan. This objective accounts for the cradle to grave emissions impacts of different forms of generation, including the low carbon footprint of thin film PV modules compared to In addition, Alliant Energy and Consumers Energy, 2 utilities in the Midwest I've included the aforementioned NSF 457 Sustainability Leadership Standard for PV Modules and Inverters and their most recent solar solicitation. We would also like to take the opportunity to touch on reported use of forced labor in China's We have repeatedly and under clearly condemned the preferred use of forced labor in China's PV solar supply chain and will continue to do so as long as it remains an issue. We also reiterated our commitment to 0 tolerance of forced labor throughout our supply chain. We believe there should be no place for a solar panel Where even a single component, no matter how small, is produced by a human being against their will.
We have seen reports that authorities in the United States are developing plans to expand their Xinjiang specific import regulations to include solar. And in the latest version of the Forced Labor Prevention Act bill, the U. S. House of Representatives, including polysilicon, as a high priority sector. We recognize the challenges that this potentially creates for companies that have traditionally relied on Chinese based firms for their modules, But as an industry, we cannot accept a view of solar at any cost.
This is an important reminder that over reliance on China to supply subsidized solar comes at a price that may not only be reflected on the bottom line. It is a price that many They include needing to look the other way on environmental, social and human costs. It's also yet another reminder, 1 or several we've had this past year about the importance of diversity of supply. Before turning the call over to Alex, I would like to provide additional context on the effects of tariffs on the U. S.
And global TV markets. In December 2012, during the Obama Biden administration. The United States imposed antidumping and countervailing duties after determining that domestic crystalline silicon industry Materially injured by imports of crystalline silicon cells and modules that were sold at less than fair value and subsidized by the government of China. In March 2019, the United States continued these tariffs. There also was a second set of antidumping and countervailing duties on Chinese cryson silicon modules with non Chinese sales.
Those duties were imposed in 2015 and in 2020 they were continued. Given these tariffs only apply to a portion of CRISPR silicon supply chain, Chinese manufacturers added cell and model capacity And nearby countries in Southeast Asia. Today, with this adjustment to their supply chain, our Crystalline silicon competitors can not only avoid these tariffs, but also continue to use government subsidized polysilicon, ingots and wafers manufactured in China. Separately, In February 2018, during the Trump administration, the U. S.
Imposed Section 201 tariffs on imported Tristan silicon cells and modules from those Countries with limited exceptions over a 4 year period. However, between June 2019 November 2020, An exemption from Section 201 tariffs was granted for CRISPR silicon bifacial modules. This exclusion enabled Chinese Solar companies with bifacial cells and modules assembled in Southeast Asia to avoid the Section 201 tariffs as well as the anti dumping and countervailing duties while they're still using subsidized polysilicon and ingots and wafers from China. Despite actions by the United States and India, Most global markets have allowed unencumbered access of government subsidized panels from China, resulting in PV economy and global goals that are largely beholden to a single technology supply chain and country. We believe our differentiated technology and advantaged cost Structure and a balanced perspective on growth, liquidity and profitability has enabled and will continue to enable us To Crystin Silicon Technology, among the 10 largest solar module manufacturers globally, First Solar provides domestic supply security and enables the United States and global markets to reduce the over reliance on imported panels from China.
We remain hopeful for a future where both free and fair trade can be established in the PV industry. I'll now turn the call over to Alex, will discuss our Q4 and full year 2020 results.
Thanks, Mark. Starting on Slide 7, I'll cover the income statement highlights for the Q4 and full year 2020. Net sales in the 4th quarter were $609,000,000 a decrease of $318,000,000 compared to the prior quarter. This was primarily a result of higher international project Sales in Q3, partially offset by increased module volume sold in Q4. For the full year 2020, net sales were 2,700,000,000 compared to $3,100,000,000 in 20 19.
Relative to our guidance expectations, net sales were within but towards the lower end of our
guidance range.
This result was primarily caused by factors cited in our Q3 earnings call, which included the timing of the Sunstreams 2 project sale. To a lesser extent, net sales were also impacted By certain module deliveries that were delayed due to COVID-nineteen related events, including a positive case at a customer construction site, which resulted in a temporary shutdown And a shipping vessel containing 1st solar modules that was diverted from its intended destination due to a positive case on the vessel. As a percentage of total quarterly sales, our module revenue in the 4th quarter was 90% compared to 46 For the full year 2020, 64% of net sales were from our module business compared to 48% in 2019. Gross margin was 26% in the 4th quarter compared to 32% in the 3rd quarter. And for the full year 2020 gross margin was 25% compared to 2018 in 2019.
Systems segment revenue was $61,000,000 in the 4th quarter compared to $505,000,000 in the 3rd quarter. 4th quarter systems revenue was lower than anticipated primarily due to the delay in the sale of the Sunstreams 2 project. Systems segment gross margin was 18% in the 4th quarter compared to 33% in the 3rd quarter. And the 4th quarter was positively impacted by a by a $9,000,000 benefit associated with a reduction in estimated liquidated damages for legacy EPC projects, which increased system segment gross margin by 14%. For the full year, Systems segment gross margin was 26% compared to 16% in 2019.
The module segment gross margin was 27% in the 4th quarter compared to 30% in the 3rd quarter. As a reminder, the Q3 was impacted by a reduction in our product warranty liability reserve, a reduction in our module collection and recycling liability And impairments of certain module manufacturing equipment for tools no longer compatible with our long term technology roadmap. On a net basis, these factors increased Q3 module segment gross margin by 5 percentage points. Also as a reminder, sales Despite utilizing contracted routes, minimizing changes and the use of the distribution center, We incurred higher rates during the Q4 for a portion of our module deliveries due to constrained container viability in the global shipping market. With this context in mind, we're pleased with our Q4 module segment gross margin results, which achieved our guidance expectation.
The full year module segment gross margin of 20% in 2019. Full year 2020 module segment Margin included $20,000,000 of severance and decommissioning costs and $4,000,000 of ramp related expense, which in the aggregate reduced module segment gross margin of 1.4%. From a fleet wide perspective, as a result of our continued manufacturing execution, Cost of what sold at the end of 2020 met our target of a 10% decline relative to the end of 2019. SG and A, R and D and production start up totaled $102,000,000 in the 4th quarter, an increase of approximately $16,000,000 relative to the Q3. This increase is primarily driven by an increase in production start up expense from $13,000,000 in Q3 to $17,000,000 in Q4, $9,000,000 of development project impairment charges in Q4 and a $7,000,000 increase in incentive compensation expense relative to our guidance expectations, partially offset by With this context in mind, we're pleased with our operating expense result relative to our Q4 guidance range of $90,000,000 to 95,000,000 SG and A R and D and start up totaled $357,000,000 in 2020 compared to $348,000,000 in 20 19.
Included in the full year 2020 OpEx were $41,000,000 of production startup expense, dollars 12,000,000 of development project impairment charges, $7,000,000 of severance charges, dollars 6,000,000 of class action and opt out action legal fees, dollars 3,000,000 in expected credit losses on our accounts receivable as a result of the economic And $2,000,000 of retention compensation expense. Combined with litigation losses of $6,000,000 total operating expenses were $363,000,000 for full year 2020. Operating income was $58,000,000 in Q4 and 3.17 for the full year 2020. We recorded a tax benefit of $66,000,000 in the 4th quarter, which included a discrete tax benefit of $107,000,000 which includes a full year net benefit from the CARES Act of approximately $84,000,000 $24,000,000 related to the release of evaluation allowance in a foreign jurisdiction. During the Q4 within equity and earnings, we reported a full impairment of approximately $3,000,000 related to one of our equity method investments.
4th quarter earnings per share was $1.08 compared to $1.45 in the prior quarter. For full year 2020, earnings per share was $3.73 compared to a loss per share of $1.09 in 2019. Next, turn to Slide 8 to discuss balance sheet items and summary cash flow information. Our cash and cash equivalents, restricted cash and marketable securities balance at year end was 1.8 an increase of $123,000,000 from the prior quarter. Our net cash position, which includes cash and cash equivalents, Restricted cash and marketable securities left debt at year end was $1,500,000,000 an increase of $105,000,000 from the prior quarter.
Our net cash balance is higher than our guidance due to lower than expected project spend on U. S. And international development projects, The timing of cash payments for CapEx delayed to the Q1 and improved collections on module sale agreements. Note, due to the contemplated payment structure, the timing of the Sunstream's 2 project sale did not have a significant impact on our year end cash balance relative to our guidance. Cash flows from operations were $37,000,000 in 2020 compared to $174,000,000 in 20 19.
Cash flows from operations in 2020 include the previously disclosed payment of the class action opt out litigation settlement of 369,000,000 A decrease in module prepayments following an increase in Q4 'nineteen associated with IQC Safe Harbor module purchase orders. Also as a reminder, when we sell an asset at project level debt that is assumed by the buyer, the operating cash flow associated with the sale is less than if the buyer had not assumed the debt. In 2020, buyers of our projects assumed $137,000,000 debt rate for these transactions. Capital expenditures were $89,000,000 in the 4th quarter compared to $106,000,000 in the 3rd quarter. Capital expenses $417,000,000 in 2020 compared to $669,000,000 in 2019.
And Finally, before turning the call back over
to Mark, I'd like to provide an update on the strategic review of our U.
S. Project development, North American and O and M businesses. As recently announced, we've signed a definitive agreement to sell our U. S. Project development platform to Leeward Renewable Energy, a portfolio company of Ova's infrastructure.
This agreement follows a comprehensive multiphase process where more than 160 parties were either contracted or expressed inbound interest when multiple structures were considered. Based on the extensive nature of this process and the offers that we received, we believe this transaction represents the most compelling option. We're pleased that the platform will be acquired by Leewood at almost the entirety of our U. S.-based Project O and team is expected to join Leewood upon closing. The transaction is expected to close in the first half of twenty twenty one after obtaining regulatory approval and satisfying customer closing conditions.
Subject to closing acquisition, Leeward will sign or assume 1.8 gigawatts of module purchase orders, of which 7 44 megawatts represent new bookings. While approximately 0.4 gigawatts are included in the upfront purchase price, the remaining approximately 1.4 gigawatt of modules are expected to be added to our contracted backlog and are expected to be recognized as future module segment revenue. As previously noted in our U. S. Project development sale announcement, We stated that we intended to retain 1.1 gigawatt AC of U.
S.-based projects that we plan to sell separately. After this announcement, we closed the sale of our 2 project signed agreements to sell our Sunstream 45 projects and are in late stage negotiations to sell our Sunstream 3 project, which totaled 7 50 Megawatts AC. The remaining projects are uncontracted and expected to be sold in 2021. As it relates to the sale of our North America O and M business to NovaSource Power Services, a portfolio company of Clervest Group, although we initially expect The sale of this business to close in the Q4 of 2020, certain conditions to close and remain outstanding. We expect these remaining conditions to be satisfied and the transaction to close the first half of twenty twenty one.
I'll later discuss the financial impact of these transactions during the guidance portion of today's call. Now I'll turn it back over to Mark to provide a business and strategy update.
All right. Thank you, Alex. As our company's founding over 20 years ago, The PV industry has been through periods of rapid growth, declining costs and technology evolution. One of the few solar companies that both entered and exited this last decade. We have continued to adapt our business model to remain competitive and differentiated In a constantly evolving market.
For example, our original instance into O and M and EPC and project development was to address an unmet need of the market and capture a profit pool. Our acceleration of Series 6 Production was a competitive response to address the current market condition. Despite these transformation, among others, Our core identity as a module manufacturing company with a differentiated cattail technology has remained constant. As we've looked into the future with a more focused business model, our pace of innovation will be critical to our competitive strengths, enabling us to leverage our points of differentiation and capture compelling value for our technology. CURE, The Crafting Warranty and Responsible Solar Strategy are recent examples of innovations enhancing our competitive position in the market.
The market momentum for PV continues to build. Our Series 6 energy, And environmental advantages are all key to Machaders, which we believe will enable us to meaningfully participate in this wave of demand Based on the growth of selected PV markets and our competitive advantages, we believe we can grow our Manufacturing capacity while still selling our products into regions where our technology has point differentiation. Within this context, Slide 9 provides an updated view of our global potential bookings opportunity, which now totals 19.7 gigawatts across early to late stage opportunities through 2023. In terms of segment mix, this pipeline of opportunities is exclusively third party module sales. In terms of geographical breakdown, North America remains the region with the largest number of opportunities at 14.9 Gigawatts.
Europe represents 2.3 Gigawatts, India represents 1.8 Gigawatts with the remainder in other geographies. A subset of this opportunity set is our mid to late stage booking opportunities of 12.6 gigawatts, which which reflects those opportunities we feel could book within the next 12 months and includes the aforementioned 1.4 gigawatts The contracted volume subject to satisfaction of conditions precedent. This subset includes approximately 10.2 Gigawatts in North America, 1.2 Gigawatts in India, 0.9 Gigawatts in Europe, of which 0.7 Gigawatts is based in France and the remainder in other geographies. This opportunity set coupled with our contracted backlog gives us confidence as we continue scaling our manufacturing capacity. Turning to Slide 10, as we have continued to drive additional throughput, Increased average watts per module and improved manufacturing yield.
Our Series 6 production exited 2020 with nameplate capacity manufacturing of approximately 6.3 gigawatts split between 4.1 gigawatts at our international factories in Vietnam and Malaysia and 2.2 gigawatts in Ohio. With the commenced production at our 2nd Series 6 factory in Malaysia, Our global manufacturing footprint increases to 6 factories. At the end of 2021, we anticipate increasing nameplate capacity to 8.7 gigawatts, which includes 2.6 gigawatts capacity in Ohio and 6.1 gigawatts across 4 factories in Malaysia and Vietnam. This 2.4 gigawatts of incremental year over year capacity is reflective of our new Malaysia factory and expected improvements in average watt per module and throughput across the fleet. By the end of 2022, We anticipate increasing throughput by 12% compared to our rerated throughput entitlement and expect continued improvements in our average WAF per module and manufacturing yield.
Importantly, by the end of the year, we anticipate increasing our fleet wide nameplate manufacturing capacity to 9.4 Gigawatts, which includes 2.6 2.7 Gigawatts of capacity in Ohio And 6.7 gigawatts across our international factories. This 0.7 gigawatts of anticipated incremental And may seek to further diversify our manufacturing presence. In addition to the factors we previously highlighted, we are also evaluating domestic and international policies to ensure any such expansion is well positioned. While we have made no such decisions at this time, Any greenfield capacity additions are unlikely to contribute to our 2022 production plan. From a production perspective, in 2021, we expect to produce approximately 7.4 to 7.6 gigawatts, which is within the 7.3 to 7.7 gigawatt range we have provided at this time the last February guidance call.
Note, Our 2nd Malaysia factory will continue its ramp period through the end of the Q1 and we are planning for over 3 weeks of downtime across the fleet to implement technology and throughput upgrades. In 2022, with the addition of the fully ramped factory in Malaysia and ongoing improvements across the fleet, we expect to produce 8.6 to 9.0 gigawatts. Turning to Slide 11, I I'll now provide an update on our technology roadmap. Over the course of 2020, we've made steady progress on our technology roadmap ending the year with a top bin of 445. Early in 2021, we have demonstrated continued progress increasing our fleet wide average For module 2, 440 for February month to date and for our new Malaysia factory introduced our Series 6 plus module, The next phase of our technology roadmap with the current top band of 4.50 watts.
Leveraging our existing Series 6 toolset, We increased our module form factor by approximately 2% and increased our module efficiency, which has increased our top bin production by approximately 10 watts. Note, after our 2nd Malaysia factory ramp is completed, we anticipate our top bin will be 4 55 watts. Importantly, this increase in form factor is sized to reduce balance of system cost per watt by adding without material changes to the installation process or support structure. We anticipate implementing Series 6 Plus across the fee over the course of 2021. From a manufacturing cost perspective, we expect this additional wattage will reduce our cost and sales rate per watt, which I will later discuss.
For the Q4 of 2021, we anticipate commencing initial production of our copper replaced Series 6 or CURE on our lead line production. As previously disclosed, this program is expected to not only increase module wattage, but also meaningfully improve life Accordingly, by the end of 2021, we anticipate our top production bin will reach 460 to 465 with an expected 30 year warranty delegated rate approximately 50% below our existing baseline. Given TV power plants have an expected useful life of up to 40 years, a reduction in a module's long term degradation is expected to be a material benefit As it increases energy density of the module and lifecycle energy generation. As demonstrated on Slide 12, We believe the benefits of improved module efficiency and temperature coefficient will result in a 7% higher energy density in the 1st year for our 4 65 watt CURE module compared to our 4 40 watt Series 6 module. Due to the expected reduction in our fewer modules long term degradation rate, we expect this improvement can increase to 20% in year 40, which represents a 13% improvement over the life of the asset.
As we've stated previously, we believe Chures significantly increases Series 6's competitiveness against bifacial modules. As a point of reference, bifacial modules generated an estimate 4% to 8% more energy than comparable monofacial modules. More importantly, FuelWorks energy uplift does not increase the module or balance of system costs as typically seen with bifacial modules. By the end of the Q1 of 2022, we anticipate the entire fleet will be converted to cure. This is anticipated to provide additional benefits to our average watt per module and cost per watt.
Through the implementation of our copper replacement program combined with our ongoing R and D program, we're aiming to achieve a top production bin of 4.75 to 4.80 watts by the end of 2022. So on our Q2 earnings call, we stated that we expected a 4 80 watt module bin in 2023. With a CAT sales sell efficiency entitlement in excess of 25%, we see a path to significantly increase our module wattage and efficiency in the mid term. With this path to increase efficiency coupled with our degradation, spectral response and temperature coefficient energy advantages and vertically integrated manufacturing processes, we believe the outlook for our technology remains well positioned in a global PV market. Finally, we continue to focus on advanced research and development and are evaluating the potential to move beyond a single junction device and leverage the high band gap advantages of CATL in a multi junction device.
A multi junction device has the potential to be a disruptive high efficiency low cost module with an advantage energy generation profile. While the evaluation of this technology is in early development, We are aiming to utilize many of the product enhancements in our existing CAT cell roadmap. Turning to Slide 13, I'll provide some context around our module cost per watt. As initially presented on our guidance call in February 2020, we forecasted A Series 6 cost per watt reduction of 10% between where we expected to end 2020 and the end of 2019. Despite unforeseen challenges related to the pandemic, pricing pressures and the global shipping market and rising commodity costs, Roadmap for the year and achieve this target.
Looking into 2021, I'd like to start by addressing how we intend to manage key bill of material and sales rate costs. Firstly, given our module utilizes the cad tel chemistry, Our cost per watt is unaffected by fluctuations in polysilicon pricing. Secondly, from the glass perspective, Growing solar demand and the emergence of bifacial modules have continued to put pressure on the supply and cost of PD glass. However, our glass procurement strategy primarily relies on forward contracts and localization of glass supply. In 2021, we intend to further localize our glass needs domestically in the United States and Malaysia through long term supply agreements.
This strategy enables us to mitigate the cost of variable spot pricing for glass and inbound freight. Thirdly, from a sales freight perspective, Utilizing contracted routes and minimizing changes helped alleviate some of the impact of higher spot rates in 2020 and the Q1 of 2021. Despite higher shipping rates expected in 2021, we intend to utilize We expect sales trade and warranty to reduce module segment gross margin by 7 to 8 percentage points in 2021 compared to 7 percentage points in 2020. Finally, as part of our Series 6 Plus implementation, we anticipate a reduction in the module profile by reducing the thickness of our frame and junction box. In addition to reducing the bill of material costs, we anticipate this development will enable us to increase Module shipping container modules per shipping container by approximately 10%.
As it relates to our Ohio manufacturing facilities, despite Exiting 2020 with a higher cost per watt in comparison to our international factories, we anticipate significant improvements in 2021 through the following initiatives. Firstly, in the Q4, the manufacturing yield was 96%, which was below the fleet average. We anticipate this will improve to 97% by the end of 2021, which provides a benefit to our fixed and variable cost per module. Secondly, we anticipate increasing our nameplate manufacturing capacity to 2.6 gigawatts by the end of the year, an increase of 18% compared to the end of 2020. Finally, a covered glass facility in Illinois started in the Q4 of 2020 And our float glass facility in Ohio started in the Q1 of 2021 and will supply our Ohio factory.
We We anticipate this will provide a benefit to the variable portion of our cost per watt. Through the implementation of these key initiatives, among others, we anticipate our Ohio Cost per watt headwind relative to our international factories will exit $2,021.02 per watt higher including sales rate. On a fleet by basis relative to where we exited 2020, we anticipate reducing our cost per watt produced by 11% by the end of 2021. Due to the ramp in underutilization costs related to the aforementioned factory ramp upgrades Challenges related to sales rate, we anticipate reducing our cost per watt sold by 8% by the end of the year. As we look beyond the midterm, I would like to revisit the 5 key levers that we believe will enable us to continue reducing our cost per watt.
Starting with efficiency, we anticipate increasing our top production bin from 445 in December 2020 to a top production bin of 4.75 to 4.80 watts by the end of 2022. With a mid term goal of 500 watts per module, we see the potential for continued improvement in our module performance. Improvements in module watts generally provide a benefit to each component of the cost per watt, including our variable and fixed bill of materials and sales rate and warranty costs. Secondly, by the end of 2022, we anticipate increasing throughput by 12% compared to our rerated capacity utilization baseline through the implementation of additional tools and debottlenecking efforts. This drives additional throughput on our existing manufacturing footprint, resulting in the fixed cost solution benefit.
Thirdly, while we've made steady improvements to our manufacturing yield over the course of 2020, achieving 97.6% in December, we anticipate a fleet Wide yield of 97.5 percent in 2021. While our international factories have a yield yield in excess of 98%, the planned upgrades for Series 6 Plus and Cure are expected to impact yield performance during the year. However, in the midterm, we see a path to increase our fleet wide manufacturing yield to 98.5%. Fourthly, we see mid term opportunities to reduce our bill of material costs by 20% to 25%, primarily across are glass and frame. Finally, we believe the combination of fitting our model profile and transportation optimization can lead to a 15% reduction in freight costs.
Combining the benefits of our CURE and our other R and D work with aforementioned cost levers, We believe we are strongly positioned to continue to drive Series 6 cost per watt, efficiency and energy improvements over the near and midterm. I'll now turn the call back over to Alex, who will discuss our financial outlook and provide 2021 guidance. Thanks, Mark.
Before discussing our 2021 financial guidance, I'd like to highlight our core principle, which is Endeavors create shareholder value through a disciplined decision making framework that balances growth, liquidity and profitability. As As it relates to growth, we anticipate increasing our nameplate manufacturing capacity to 9.4 gigawatts by the end of 2020, driven by the addition of our 2nd factory in Malaysia and ongoing improvements in average watts to module throughput manufacturing yield. As Mark previously highlighted, we're evaluating potential future capacity expansion and may do so beyond our existing geographic footprint. Strong bookings performance in 2020 year to date 2021 and current forward contract position of 13.7 gigawatts Gives us commercial confidence as we evaluate the potential for incremental expansion. Our liquidity position has been a strategic in an industry that has historically prioritized growth without regard to long term capital structure.
For example, one of the few solar companies that both entered and The last decade and our strong balance sheet has enabled us to weather periods of volatility and also to see growth opportunities. Additionally, we were able to self fund our Series 6 transition whilst maintaining our strong liquidity position, ending 2020 with $1,500,000,000 of net cash. We anticipate we'll be able to continue to self fund future capacity expansion and strategic investments in our technology, whilst maintaining And from a profitability perspective, Contracted backlog provides increased visibility into future sales, reduces financial exposure to spot pricing for TV modules, product and provide an acceptable profit per watt. For example, in 2022, although there remains significant uncontracted volume yet to book, The ASP across the aforementioned 5.9 gigawatts of volume potential deliveries in 2022 is only 10% lower than that of the 7.2 gigawatts Volume to be shipped in 2021. With a target 11% reduction in cost of what produced between year end 2020 year end 2021, We believe there's an opportunity to capture an attractive margin.
So with this context in mind, I'll next discuss the assumptions included in our 2021 financial events. Please turn to Slide 14. As it relates to our U. S. Project development business, we anticipate that the transaction will close in the first half of twenty 21, we expect proceeds of approximately $270,000,000 Included in this price are 3.90 3.92 Megawatts of Series 4 and Series 6 1st solar modules, the 10 Gigawatt Project Pipeline, including the 5 contracted development projects, the 30 Megawatt operational Beria project and certain other safe harbor equipment.
On closing, we expect to recognize a pretax gain on Sales shown on the income statement between the gross margin and operating income lines of approximately 25,000,000 As it relates to our North American O and M business, we anticipate the transaction will also close in the first half of twenty twenty one. And upon closing, we expect to recognize a Both our U. S. Project development and North American O and M Associates. As of the end of 2020, we had approximately 300 associates Our North American O and M and U.
S. Project development businesses collectively. And at closing, substantially all of these associates will join Leeward and Novosource, respectively. As we exit North American O and M and U. S.
Project Development, we see the potential for significant cost reductions from these decisions, which is reflected in both the cost of sales As we mentioned on prior earnings calls, including Q3 of 2019 and as is also the case in Q4 of 2020, In accordance with low project development revenue, we see an adverse impact to the system segment gross margin due to the fixed cost burden that sits in the cost of sales line. Similarly for the O and M business, the majority of the non direct project related costs to support the O and M business sit within the cost of sales line. In total, in 2021, we expect to see approximately $15,000,000 in annual cost of sales savings associated with the sale of the North American O and M business. With an additional approximately $5,000,000 of savings in 2022, we expect run rate annual savings $20,000,000 from the sale from 2022 to the end of the year. The sale of the U.
S. Project development business is expected to result in Approximately $35,000,000 of savings in 2021 and an additional $10,000,000 to $15,000,000 of run rate savings in 'twenty two For a total annualized benefit from 'twenty two onwards, approximately $45,000,000 to $50,000,000 of which approximately 60% sits in the operating expenses line. From a systems perspective, remaining in our 2021 cost structure are approximately $15,000,000 of expenses associated with our Japanese development business split between operating expense and cost of sales and approximately $15,000,000 of cost of sales associated with our power generating With the booked backlog, systems backlog of approximately 200 megawatts AC of systems projects in Japan and a strong competitive position, We believe there's an opportunity to capture an attractive profit pool there. Next, our 2021 shipments are expected Between 7.8 gigawatts, which exceeds our production plan for the year of 7.4 to 7.6 gigawatts. There are several factors driving Firstly, we produced approximately 1.6 gigawatts in the 4th quarter, which exceeded our guidance from the 3rd quarter earnings call by about 120 megawatts.
Secondly, in the Q4, we shipped 1.8 gigawatts, which was 100 megawatts below the midpoint of our guidance range. And finally, we Ship approximately 150 megawatts of Series 6 modules as part of the U. S. Project development transaction that were previously intended to safe harbor the 26% investment tax Our ongoing Series 6 throughput and technology programs are expected to impact 2020 operating income by $60,000,000 to $70,000,000 This is comprised of $5,000,000 to $10,000,000 of ramp expenses incurred of our second factory in Malaysia, We anticipate will exit its ramp period by the end of Q1. As previously mentioned, we have fleet wide factory upgrades to incorporate Series 6 Plus, and throughput improvements in 2021.
The upgrades will require approximately 3 weeks of downtime across fleet, resulting in estimated underutilization losses of $40,000,000 and production start up expense of $15,000,000 to 20,000,000 We anticipate these improvements will contribute meaningfully to our 8.6 to 9 gigawatt production plan in 2022. As it relates to domestic capital markets and financing, the significant utility scale solar and wind capacity additions expected in 2021 With co located battery storage increasing many projects ITC eligible basis, demand for tax equity is at this time expected to remain high. Our financial guidance assumes that bank profitability will be sufficient to supply the needs of the tax equity market or if market conditions deteriorate an appropriate legislative solution such as the ability to receive direct cash payments in lieu of investment tax credits if implemented. And finally, to date, we have largely managed the impact of the COVID-nineteen outbreak on our business and it has not had significant impacts on our operations. Our guidance accordingly assumes we will continue to be able to mitigate any such impact on our supply chain operation without the incurrence of material costs.
I'll now cover the 2021 guidance ranges on Slide 15. Our net sales guidance is between $2,850,000,000 $3,000,000,000 which includes $2,450,000,000 to $2,550,000,000 of module segment revenue. Included in our systems revenue guidance is the sale of the Sunstream's 2 project, which closed in Gross margin is expected to be between $710,000,000 $775,000,000 which includes $580,000,000 to 6 utilization losses, which are expected to reduce module segment gross margin by approximately 2 percentage points. Additionally, sales, freight and warranty are included in cost of sales and are expected to reduce multiple segment gross margin by 7 to 8 percentage points. In the United States, we're seeing some weather related impacts to module delivery schedules resulting from last week's storm, particularly in Texas.
Whilst we're in the process of balancing customers' project needs and contractual commitments, we anticipate this will impact our Q1 shipments. However, with lower Q1 sales volume and an improving cost profile over the course of the year, we anticipate our module segment gross margin will increase from 19% in the first 26% in the 4th quarter. Approximately 1 third of our full year ramp and underutilization charges are expected to be incurred during the Q1, with the It's important to note that our sellable volume in 2021 is predominantly Series 6 And Series 6 Plus, which is competing for business against bifacial technology. Whilst we are incurring ramp on utilization costs this year to integrate our Cure technology, We expect to begin realizing the value associated with these improvements in 2022. SG and A and R and D expenses are expected $270,000,000 to $280,000,000 Included in SG and A, approximately $5,000,000 of transaction costs related to the sale of our U.
S. Project development business. Operating expenses, which includes $15,000,000 to $20,000,000 of production start up expense, are expected to be between $285,000,000 $300,000,000 Operating income is estimated to be between $545,000,000 $640,000,000 and is inclusive of an expected approximately $140,000,000 gain on sale related to the aforementioned O and M and project development transactions and $60,000,000 to $70,000,000 of combined ramp and underutilization is $10,000,000 Full year tax expense is forecast to be $100,000,000 to $120,000,000 which includes approximately $35,000,000 tax expense related for the North American O and M and U. S. Project development sales transactions.
This results in a full year 2021 earnings per share guidance range of $4.05 to $4.75 And note we expect earnings per share of approximately $1 related to the gains on sale of our U. S. Project development Capital expenditures in 2021 are expected to range from $425,000,000 to $475,000,000 To complete the transition of our 2nd Series 6 factory in Malaysia, increase throughput on our existing Series 6 facilities, implement Series 6 Plus and Cure and invest in other R and D related programs. Our year end 2021 net cash balance is anticipated to be between $1,800,000,000 and 1,900,000,000 The increase from our 2020 year end net cash balance is primarily due to operating cash flows from our modules business, proceeds from our U. S.
Project development and North 16, I'll summarize the key messages from today's call. We continue to make significant progress on our Series 6 transition, both from a demand and supply perspective. Series 6 demand has been robust with 3.3 gigawatts of net bookings from previous earnings call and additional 1.4 gigawatt of volume contracted subject to conditions precedent. Our opportunity pipeline continues to grow with a global opportunity set at 19.7 gigawatts, including mid to late stage opportunities of 12.6 gigawatts. On the supply side, we continue to expand our manufacturing capacity and expect to increase our nameplate Series 6 manufacturing capacity to 8.7 gigawatts by year end 2021 and 9.4 gigawatts by year end 2022.
2021, we expect to produce 7.4 to 7 6 gigawatts of Series 6 volume, a year over year increase of 25% to 29%. We see significant midterm opportunity for improvements to our module efficiency, cost We ended 2020 with full year EPS of $3.73 and forecasting full year 2021 earnings per share of $4.05 to $4.75 And finally, we expect to close the sales of our North American O and M and U. S. Product development businesses in the first half And with that, we conclude our prepared remarks and open the call for questions. Operator?
Our first question comes from Philip Shen with Roth. Your line is open.
Hey guys, thanks for taking my questions. You've shown some healthy bookings year to date given the forced labor issue ramping up. Can you talk about how recent conversations with customers have been shaping up and perhaps how they've shifted as well? And then looking out to 'twenty two, when do you expect that could become fully booked? Looks like you're 2 thirds there.
And then what about the outlook for 'twenty three? And then in terms of your recent bookings, you talked about, I think, a 10% reduction in pricing from 2020 levels, Which might suggest that your 2022 bookings that you've gained or booked recently are in the $0.30 per watt. So I was wondering if you could comment on that or if they might be closer to the mid-0.20 dollars per watt, which is, I think, certainly On what some market participants have been sharing with us in terms of market pricing for crystalline silicon. So I know there's a lot there. Thank you very much for
All right. So, sorry, I hope to get on all 3 of them. Look, on bookings, we're real happy with the momentum. And just if you even look at the mid to late stage opportunities, we expect Opportunities which we could close within the next year with north of 12 gigawatts sitting there. Yes.
The momentum we're starting off with right now, we expect 2022 to be a very strong booking year. As it relates to the discussion and comment around new implications of forced labor, I think we try to hit on some of those themes of and it's probably not just any one particular issue, but it goes back to this concept that we refer to as responsible solar. And there clearly are a number of counterparties, customers that we engage with in Conversations that are, 1, concerned about over reliance, concern about maybe the current state Of political relationships between the U. S. And China or India and China or other markets as well.
And as a result of that, looking for alternatives. And one thing that's great about First Solar, not only do we have great technology and great capabilities, but having A different standard which we hold ourselves accountable for. And we have different value attributes that we can provide to our Customers and certainty is 1 in dealing with a counterparty or a supplier with a different it holds themselves from an integrity Standard to the highest levels. I think it's important and it's starting to come into the bookings and what we've started to see now in the pipeline that we have. So Phil, it's one of many.
I think there's still a lot of people that are trying to understand the whole forced labor and how it plays out and what are the potential implications are Around it, but what I will tell you is that some of, end customers that we have, not referring to here as the IPP or developer or EPC, but others that are more the offtake agreements. They're very concerned and in some cases They're incorporating conditions within their procurement criteria to ensure that there's zero tolerance for forced labor and Not only the modules of which are being procured and utilized in the project and they have in the U. S. Or somewhere else internationally, they want to make sure That their suppliers also have 0 tolerance and there's nowhere through their entire supply chain do they tolerate forced labor. And that makes it very hard as you know with the complexity of silicon supply chain to make those types of assertions and representation.
As it relates to our goals and I'll It will be very transparent. I'm not going to give you a discrete timing, but we clearly want to be as we We exit this year, our goal is we want to be sold out of 'twenty two. We want to be more than halfway sold out of 'twenty three and have a meaningful portion of our 24 volumes contract. So when you look at where we are right now and as you've indicated, we're in pretty good position for 'twenty two. We clearly have more Work to do and I keep telling our Chief Commercial Officer, let's keep selling, keep selling and taking the opportunities that And it's good to see the pipeline and the robustness and resiliency that we have that hopefully gets us to that goal of accomplishing that by the time we exit the year.
And that clearly would put us at a much higher than we historically have tried to say let's maintain a 1 to 1 sold to book ratio. We accomplished that will be Much higher than our historical one to one and at least where we sit right now, we feel confident we can get that. ASPs, What I'll say, Phil, around that is that, I mean, if you look at the Q1 it comes out or the K in this case, I think it's going to come out with an average of Like $0.38 or something like that the metrics are going to tell you that. I wouldn't say that we're starting to see increase in ASPs. I wouldn't say that's necessarily a factor of what we're seeing.
Are we starting to see depends on each year which we're booking out into, ASP starting to firm up and maybe we'll start to see some resiliency In the upward direction, but like I said, we said on the call is we're very pleased and happy with the ASPs that we've been able to capture relative Value we create in our technology and then the opportunity to continue to improve our overall cost reduction roadmap, maintain Solid gross margin, but more importantly, as you look at year over year, we're growing our capacity and our sold volumes will be up significantly year on year as well with all Sort of trades contribution margin that helps expand operating income.
Our next question comes from Ryan Lee with Goldman Sachs, your line is open.
Hey, guys. Thanks for taking the questions. I had 2 here. I guess first, Mark, can you of the 1.1 gigawatts of systems, I think you talked about this, but How much is targeted to be sold this year, next year and then presumably 2023 will be the last year where you see some systems business revenue and how much in that year? And then the gross margins, I know they depend a lot on mix, but it seems like if we back out The components where you're doing pretty well, it's about a high single digit low teens number implied for this year.
Is that going to be And the go forward margin level, I would have thought it'd be a little bit higher given Sunstream's made it into 'twenty one versus 2020, but any thoughts around mix implications for margins and how to think about margins for that business as you still have some revenue to monetize over the next Couple of years. Thanks guys.
Yes. I'll take the first one, Brian, and I'll let Alex take the question on gross margin. As it relates to the systems business, the 1.1 is largely the U. S. Assets that we still have.
Sunstream is contracted. The rest of the Sunstream's complex, we've signed, but we haven't Finalize what portion we signed, if another portion hasn't signed yet, but the plan would have all that done hopefully by And that will take the largest portion of the U. S. Volumes that aggregates up to on an AC basis, I don't know, 600 megawatts Or something like that. And there's another few 100 megawatts that's left in the U.
S, Which our plan would be to move forward as quickly as possible and ideally have all of that sold out By the end of this year. So those are just development sites of which we would then try to contract module off FIG agreements to. But the goal for the U. S. Stuff would be to monetize all that volume this year And sooner the better.
The development team is going with the transaction, so we don't have the capabilities really to continue with The development activities will have to enter into a service agreement effectively for with Leeward To continue to support those projects until they're sold out. The balance of those, there is still 200 megawatts to 300 megawatts Of contracted Japan projects. And there's still more that's not Contracted at this point in time, we have feed in tariffs, but we haven't actually fully accomplished the permitting process and interconnection and other things that would ultimately We also may require for a recognizing of a booking. That volume will be recognized. Most of it will show up in 'twenty three.
There'll be some in 'twenty one and 'twenty two. But if you look at the CODs on those projects, most of them have 23 CODs as we currently see them. But as you know, the bookings and the average ASPs on those projects are highly attractive. And so We'll monetize that over the next 3 years and we'll see if we go beyond that. Again, we still have some more projects with feed and tariffs that we haven't booked yet that Potentially could create more volume into the 'twenty three maybe even 'twenty four period.
But I'll let Alex talk about the gross
margin. Yes. So Brian, if you look at the guidance We gave total revenue $2,850,000,000 to $3,000,000 of that module $245,000,000 to $255,000,000 That implies systems of $4,000,000 to $450,000,000 of revenue. And on the gross margin side, on the $710,000,000 to $785,000,000 company wide and module $580,000,000 to 25% so again implies systems 130% to 160%. So if you look at those gross margins, it's 25% to 26% at the company level.
Systems looks pretty high, but it's really very limited volume there. So systems is in the low 30s skewed a little bit by Sunstreams and then A little bit of Japan coming in back end of the year, but the module there comes in at about 24% to 25%. So that's where you're seeing module Gross margin for the year. And then as you're talking about kind of how to look at that going out, we tried to give a little bit of color here On the gross margin level, we talked about the ASP decline and what we've got booked, right? And if you look at 'twenty two, there's clearly still a lot to book in there, but we do have a significant amount We said if you look at the ASP decline, 'twenty one and 'twenty two goes down about 10% and then Cost decline going down about 11%.
Now those are off different bases, obviously, on an ASP and a cost per watt. But you can see that we're getting cost per watt Coming down at or slightly better than the ASP decline going from 'twenty one into 'twenty two and at the same time you're getting some additional volume coming through where So you get that scale on a percentage basis, you get a better benefit there from dilution of some fixed costs, but on an absolute dollar basis, you get just the benefit of increased volume coming through there. And then as we talked about before, it matters also to go down to the operating margin level. So we talked about some of the cost reductions coming out from the sale of the O and M and Project Development business. Some of that comes out in 2021, but there's also a lag a little bit that comes out in 2022.
So that's going to see cost of sales and OpEx Continuing to reduce as we go into 'twenty two and that again helps us down to an operating margin level.
The only thing I'll add to that too, Brian, we state Alex mentioned in his comments, it's just that there is a pretty significant headwind at least in 2021 for underutilization in order to Deal with the upgrades that we need to do for primarily for CURE. So there's a significant cost, I think $40,000,000 in total of underutilization that we'll have to absorb within 'twenty one. So that's weighing down on the I think if you adjust for that, I think the gross margin goes up a couple of percentage points, something in that range.
Our final question will come from Ben Kallo with Baird. Your line is open.
Thank you for making time for me. I kind of want to boil it all down. So I heard you say several different things about gross margin improving. You said ASPs are firming up. You're much locked into 'twenty two.
So if I go to 'twenty two, EPS should be up, right? And then my second question is, I guess, Alex, when you build a new factory, how do you determine whether or not You have the ROIC on that. I guess there's probably a margin associated with that. And so you have to have some kind of firm belief in your long term Contracts to invest that money. And so those are my 2 questions.
Yes, Ben, I'll take the first one and let Alex take the second one. Ben, we can't we're not giving guidance for 'twenty two at this We gave some pretty strong indicators of what will drive 2022 which will be the volume, the production volumes as we referenced, the new product Sure. The one thing I want to keep making sure that's represented in there is and all the 'twenty two volume will be cure. If you look at the one slide which shows the energy uplift, There's a meaningful energy uplift because of the improvement of long term degradation. And that we sell energy, we sell value.
And so that is important to understand. We also referenced that there was a lot of interest and rightfully so when bifacial modules came out and they talked About a 48% energy uplift relative to monofacial modules of similar efficiency. If you look at where we are With our pure product and lifecycle average on top of the initial tempco and efficiency pop, there's another 10 percentage points of lifecycle energy through improvement of long term irrigation. And so you can take our product And even against CRISAN silicon bifacial that maybe even has a nameplate of 150, 175 bps better efficiency. And you're going to find that over the lifecycle energy profile, we're going to So it's the technology, it's the supply improvement, the production plan improvement that we're talking about and continue Reduction of our own internal costs.
I think 2022, we're not going to give specific guidance, but we gave enough information I think to help people look across Horizon and what 'twenty two should look like. Yes. Ben, I think about ROIC, so I look at it across both an individual factory and on a company wide basis. And If you think about individual factory at a gross margin level, depending on
where that volume is sold, if more of it is sold outside the U. S. And then as we expand, you may see that Gross margin level going down and being more challenging for an individual factory relative to the current book volume. But at the same time, adding a factory adds very And also actually have a slight benefit in diluting from the fixed costs instead of the cost of sales line. So therefore, On an operating margin benefit, anything with the factory can look better.
So because it has impacts not just for an individual factory, but also for diluting fixed cost, At cost plus the benefit you get of extra volume with pretty much the same OpEx given that as we said before, we think 80% to 90% of our operating cost line is fixed. We have to look at it both individually and across the company. But we certainly want to make sure that if we're adding, we're being significantly above the weighted
We have reached the end of our time for the question and answer session. This concludes today's conference call. You may now disconnect.