First Solar: Our Solar Panel Manufacturing Costs Are Now Below $1 Per Watt

Breaking the $1/watt Barrier
The $1 per watt price point has been a goal of the solar industry for a long time: First Solar announced that "it reduced its manufacturing cost for solar modules in the fourth quarter to 98 cents per watt". It's a bit unfortunate that it is happening to First Solar at a time when the economy is in bad shape and fewer people and corporations can afford solar panels, but it is nonetheless a great achievement.A bit of history:

First Solar began full commercial operation of its initial manufacturing line in late 2004. From 2004 through today, manufacturing capacity has grown 2,500 percent to more than 500 megawatts in 2008. First Solar’s annual production capacity will double in 2009 to more than 1 gigawatt, the equivalent of an average-sized nuclear power plant. These escalating volumes have been accompanied by a rapid reduction in manufacturing costs. From 2004 through today, First Solar’s manufacturing costs have declined two-thirds from over $3 per watt to less than $1 per watt. First Solar is confident that further significant cost reductions are possible based on the yet untapped potential of its technology and manufacturing process.

So capacity is doubling this year, while manufacturing costs are now 66.6% lower than they were 5 years ago. That's what I call progress!

Unfortunately, the manufacturing costs are only part of the final cost of solar panels: Installation is costly too. To achieve parity with other power sources, First Solar would have to bring down manufacturing costs to about 65-70 cents per watt. That might not always be the case, though. A tax on carbon (preferably revenue neutral), internalizing the costs of pollution, might make other power sources more expensive, making solar relatively more competitive.

Via First Solar, Consumer Energy Report
Photo: Phoenix Solar Project
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