Driving forward in the race for highly efficient solar cells, First Solar says it has converted 22.1 percent of the energy in sunlight into electricity using experimental cells made from cadmium telluride—a technology that today represents around 5 percent of the worldwide solar power market. The company’s commercial line of solar cells has reached an energy conversion efficiency of 16.4 percent.

The theoretical efficiency limit for cadmium telluride cells is above 30 percent—significantly higher than that of conventional silicon. (Today’s commodity silicon-based solar panels have efficiencies between 16 and 18 percent; their theoretical limit is thought to be well below 30 percent.) First Solar, which is the only major manufacturer of cadmium telluride solar panels left in the United States, is working to bring commercial solar panels closer to that limit. “The gap between what’s theoretically achievable and what’s out there today has been pretty broad,” says Raffi Garabedian, First Solar’s chief technology officer. “We are closing that gap at a breakneck pace.”

Solar panels made with cadmium telluride could be significantly more efficient than conventional silicon-based panels.

One obstacle to closing the gap is the maximum voltage available from cadmium telluride cells. Maximum voltage correlates directly with efficiency. For decades researchers have been unable to break the one-volt barrier, but researchers from the National Renewable Energy Laboratory and Washington State said in a paper published February 29 in Nature Energy that they have exceeded that limit.

Conventional silicon solar cells represent more than 90 percent of the solar power market today, but they are relatively expensive to make. Cadmium telluride, a thin-film technology, offers improved performance in that it operates close to its maximum efficiency, particularly in hot, humid conditions. Though thin-film cells are ostensibly cheaper to make, their efficiency has lagged behind that of conventional ones. Still, they have shown more improvement. “Monocrystalline silicon is the gold standard, in terms of efficiency, for today’s solar power,” says Garabedian, “but the record for the most efficient commercially available product was set in 1999, at about 25 percent, and it’s still there. In the same time frame, [cadmium telluride] has improved by a huge margin.”

Kelvin Lynn, of Washington State University, led a team that broke through the long-standing one-volt barrier for maximum voltage from a cadmium telluride cell.

But cadmium telluride manufacturers have struggled in recent years. In 2013 First Solar acquired GE’s technology after GE canceled plans for a $300 million plant in Colorado. A number of other manufacturers have been launched and failed, including Abound Solar, a Colorado-based startup that received a $400 million loan guarantee from the federal government and then filed for bankruptcy in 2012.

First Solar concentrates on the utility-scale solar market rather than rooftop solar installations, where the need for higher-efficiency panels has, to date, dictated the need for silicon-based cells. The company has developed some of the largest solar farms in the world, including the Topaz and Desert Sunlight projects, in California, each of which has a capacity of 550 megawatts.

Because cadmium telluride is a thin-film technology, it requires less material to produce a comparable amount of electricity than conventional silicon technology. The manufacturing process is also simpler. In principle, that should lead to lower costs for the electricity produced. In practice that’s not always the case; according to GTM Research, the cost per watt of crystalline silicon panels will drop to $0.36 per watt by next year. In 2013 (the last time the company released production cost figures), First Solar said its cost per watt had reached $0.57.

Cost comparisons aside, Wall Street is bullish on the company’s prospects: its share price has risen by 68 percent in the last five months.

“The industry is in a transformative period,” says Garabedian. “We’re still very concerned about the cyclic nature of the solar industry, and about getting caught with overcapacity. We’ll keep improving this technology and see what the future brings.”