During First Solar’s (NASDAQ: FSLR) third-quarter earnings 2011 conference call on Nov. 3, interim CEO, Michael Ahearn, also the company’s chairman and founder, signified a number of changes for the company in terms of strategy and production going into 2012 and beyond. Moving forward the company will focus on new markets and conversion efficiency increases, rather than expanding production capacity and trying to further penetrate existing, flooded markets with flagging subsidies.

First Solar announced its third quarter 2011 results on Oct. 26, following the surprise announcement that the company dismissed former CEO Robert Gillette.

“The fit wasn't right,” Ahearn said during the call.

He dismissed rumors that any other improper allegations had caused the dismissal.

The flooding of the market by lower-cost crystalline silicon photovoltaics than had been anticipated has made the market much more competitive. Between that and existing markets stagnating, the company needed to reevaluate its strategy.

“In spite of future prospects, we operate in subsidized markets where the short term prospects are not as attractive,” Ahearn said. “The European countries that subsidized demand to enable the solar industry to scale up to its present level have been reducing their subsidies. In the U.S., there have been no significant new state level solar programs in several years. And solar industry is feeding mostly off of legacy subsidies in California.”

The company sees this as a turning point.

“For First Solar, the central task is to transition from these less attractive markets to markets that will drive the future and to do so in a manner that will allow for operational and financial stability,” Ahearn said.

He stressed the importance of looking to emerging markets like India, the Middle East Africa and China. Going forward, First Solar will foster deeper relationships with customers, communities and policymakers to develop solutions and encourage policies that support the development of large-scale solar, according to Ahearn.

The company also plans to reduce the price of its modules to meet demand without significant subsidies.

“It's easy to talk about doing them but harder to execute and will cost money,” Ahearn said.

First Solar already is moving forward on certain aspects, like increasing efficiency of its modules, thereby lowering the cost per watt. During the recent quarter, the cost of manufacturing First Solar PV fell to 74 cents per watt.

“We're executing a plan to further reduce cost per watt to 52 cents to 63 cents per watt and increase conversion efficiencies to 13.5 to 14.5 percent by the end of 2014,” Ahearn said.

It’s also dropped its balance of systems costs to below $1 per watt and reduced the amount of time it takes to build a 50 megawatt plant from 10 months to 7 months, he said.

As part of its new focus, First Solar will slow down its plans for manufacturing expansion, delaying the commissioning of a plant in Vietnam that it’s building. Ahearn said the company won’t increase manufacturing until it has significant new demand for its products.