Report: Solar Electricity Cost Likely to Fall 50% in 2009

By Ucilia Wang of Greentech Media on November 23, 2009

The cost of solar electricity is likely to drop by 50 percent in 2009 from the previous year due largely to a big fall in solar panel prices, said New Energy Finance Monday.

The 50 percent drop refers to what's commonly called the "leveilized cost of electricity," or the cost of producing the power over the lifetime of a solar power plant (from building to operating power plants). Utilities and banks use these metrics to determine their investments and operational costs for these generation facilities over time.

The levelized cost for solar electricity fell to as much as $160 per megawatt hour in 2009 for the worldwide market, said Jenny Chase, head of solar research at New Energy Finance.

The $160 per megawatt-hour came from installations in sunny spots – such as the deserts in the western United States – that used the cheaper thin-film solar panels, like the ones produced by Tempe, Ariz.-based First Solar. The cost of building solar energy systems using thin films can be as low as $3 per watt, New Energy Finance said.

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