We report CdTe/CdS solar cell with CdTe layer grown by sputtering method. A controlled etch and anneal process on the sputter-grown CdTe films was performed to increase the average grain size of the film. The process involved dipping the CdTe films in a saturated solution of cadmium chloride (CdCl2) in methanol (2.08 gram in 100 ml) followed by a 30 minute annealing at 400 °C. We performed various experiments on this process by varying the dipping times, drying process and annealing times and analyzed the resultant films using Scanning Electron Microscopy (SEM). We could see a clear increase in grain size from 200 nm to 5 μm after CdCl2 treatment. The process also increased the overall roughness of the sample so that more light is absorbed than reflected. We prepared solar cells using CdTe as p-type layer and CdS as n-type layer. The efficiency of the cell improved from 1.1% to 4.2% after air annealing. The effect of air-annealing is studied by means of quantum efficiency measurement.