Solarbuzz.com reported this morning that prices for solar modules fell another few pennies per watt. As supply has fully caught up with demand in 2009, prices are skidding down. But since fossil fuel prices remain substantially lower due to the global recession, the price of solar remains relatively high and will take many more months of decreases before grid parity becomes a reality.
Europe price falls to record low
The price per watt of a single module fell to 4.52 euros (a drop of 2 euro cents (.4%) from April). This is a record low and is 4% lower than last May.
US solar price at 3 year low
The price in the US fell four cents (.8%) from April to $4.70 per watt. This is 2.3% below last May and the lowest price since December 2005. Prices are now ~8% higher than their 2004-05 record low. Thus, if prices continue to slide at the current pace we will see new record lows in the US by early 2010.
Solar PV Electricity Prices Down .4%
The fall in module prices translates into a fall of .09 cents (.4%) in the price of industrial solar electricity to 20.78 cents per kWh. This price is the lowest since March 2005 and only 2.4% above the record low set in June 2004. Therefore, we are poised to reach record low solar electricity prices by the end of the year.
Bottom line: Slower demand in 2009 has allowed solar producers to more than catch up with demand. Prices are falling significantly, but have a ways to go before they set record lows in the US and worldwide. And since the price of natural gas and coal are currently ~70% below their 2008 highs, the solar market will continue to be policy-driven until potential grid parity in the early 2010s via fossil fuel price recovery and further solar price reduction.
Tags: 2009, climate change, emissions reduction, Europe, grid parity, renewable energy, solar power, US
I do not think it is necessary for price parity to be achieved before solar makes economic sense. Why? When one invests in solar, they have locked in an energy price for the life of the solar unit. Lord only how high the price of carbon based energy will go during the life of your solar panels.
What is the relationship b etween cost per watt of the panels($4.70) and the cost per kwh of the electricity generated by the panel(20.78 cents)? What assumptions are made about the required roi, operating characteristics of installation, installation costs, etc?
JJ,
You make an excellent point. The fact that a solar installation today locks in a price per kWh means that grid parity doesn’t need to exist at the date of installation, just over the life of the system. So grid parity may exist in many markets in 2010 at say 18 cents per kWh because the price of fossil fuel-powered electricity will probably rise to an average of at least 18 cents per kWh in many markets during the solar installation’s operation 2010-2035. But the closer we can get solar to grid parity, the more likely average consumers will invest based on such an argument.
Ronald,
The industrial price of 20.78 cents per kWh is determined by the folks at solarbuzz.com to best represent the average price based on the global price per watt and their many years of experience in the sector. For a description of their method, please visit:
http://solarbuzz.com/SolarPrices.htm
Thanks for your comment and question, y’all.
MODEL Watt Price $/Watt
Evergreen ES-A-205 205 $769 $3.75
Kyocera KD205GX-LP 205 $770 $3.76
Kaneka G-SA060 60 $227 $3.78
Kyocera KD180GX-LP 180 $730 $4.06
Sharp 175 175 $715 $4.09
Kyocera KD210GX-LP 210 $874 $4.16
These are quantity 1 off the web pricing – I would expect Utility scale projects to be able to better these numbers. Also First Solar isn’t included in this list and they claim even better $/watt results.
Yep, these prices are falling quickly. I’ll give you an update within 10 days about the early June prices per watt and what that translates into for large-scale projects on a kWh basis (industrial users). The average selling price per watt is dropping quickly as polysilicon prices slide…
Keep checking out this blog for up-to-date info.
Peace-