Good news for solar prices?

SolarBuzz PV module prices 2001 to 2009 The sustainable energy transition blog has a brief summary of prospects for solar photovoltaic prices over the next couple of years - basically that they're headed down. As this graph from SolarBuzz shows, prices have been pretty much stagnant in the $4 to $5/watt range for about the last 6 years, in spite of exponential growth in production.

The traditional experience curve claims for solar photovoltaics suggest costs should be well under $4/watt by now. The failure to follow the experience curve over the last few years may be due to the high price of polysilicon, which the SET puts at about 7 or 8 times the actual marginal cost of production, thanks to recent shortages (and high demand largely due to the growth in solar installations!) Overly high feed-in tariff rates in Germany may also be a contributor to the high demand and acceptance of high costs, though that factor should also be declining as feed-in rates are decreased. If the $2/watt number the SET blog suggests actually happens by 2011, that's enough to bring things back to the experience curve, and gives renewed confidence that there is still considerable room for future price reductions as volume continues to increase. Another factor of 2, to $1/watt, would bring solar PV into competitive range with almost any other option for electric supply, so we could be less than a decade from real wide-scale practical deployment. Let's see the first factor of two first though!