Shares of First Solar, Inc. (FSLR 1.53%) have surged in 2017 as the company benefited from being exempt from potential solar tariffs and rode the tailwinds of industry growth. Bookings have been an astonishing 6.7 GW or nearly two years of production at full capacity, and the demand has translated to the stock market as well. 

But the great year in 2017 may not translate to a great 2018. Here's what investors should look for. 

Utility scale solar installation in the desert.

Image source: First Solar.

Series 6 will be here in 2018

The most important new product of 2018 will be the Series 6 solar panel, which will bring First Solar to a new generation of products. The panel will be more efficient than the Series 4 product it's replacing, but the most important change is a bigger form factor that should lower installation cost and time. You can see in the timeline table below that production is expected to start in the second quarter in Ohio with Malaysia lines coming online later in the year. 

Chart of First Solar's expected production timeline.

Image source: First Solar.

While 2017 was about selling as much future production as possible, 2018 will be about turning that potential into actual products and sales. Management has to prove that Series 6 will meet cost estimates and efficiency goals of at least 18% efficiency, although early production is just 17% efficient. They have a history of hitting manufacturing goals, but this is a big project that could hit road bumps along the way that could impact financials in a big way. 

Sales won't jump quickly

Management expects 2017 revenue to be $3.0 billion to $3.1 billion, but 2018 sales will likely be much lower. First Solar is transitioning to primarily solar panel and component sales rather than full system developments. Revenue per watt will be lower as a result. With only 2.7-2.8 GW of production next year there's only expected to be $2.3-$2.5 billion of revenue, or $0.87 per watt on average. 

Sales should increase by 2020 when production is expected to be up to 5.4 GW. But there will be a lull between now and then, which investors need to keep in mind. 

Spending will be high

The other factor to consider is that capital expenditures for the Series 6 expansion will be highest in 2018. Management expects $650 million in capital expenses next year and net cash will fall about $500 million to $1.6 billion to $1.8 billion. 

That will still leave First Solar with one of the best balance sheets in the solar industry, but the outflows in the next year will be high. 

A leader in solar energy

First Solar is still well positioned with a strong balance sheet and billions in sales locked up over the next few years. But 2018 will be a bit of a lull compared to 2017 when there were opportunities for First Solar to beat expectations by selling projects and delaying manufacturing upgrades.

What investors will want to watch for in 2018 is the company improving efficiency to keep pace with the rapid upgrades taking place on the silicon side of the solar industry right now. If First Solar can remain competitive on technology and maintain industry-leading margins, this could be a great stock for years to come.