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.