Renewable energy costs drop in 2009

Solar energy costs will drop by half in 2009 while other low-carbon technology costs will see their pre-subsidy costs drop by 10-20%, renewable energy analysts reported. Prices for renewable energy equipment, including wind turbines and solar panels, fell this year, but they were offset by higher financing costs in the wake of the global economic slowdown, New Energy Finance said in a quarterly research note. "As capital markets loosen up and equipment prices continue their decline, we will see the levelised costs decline, finishing the year 10% below the end of last year across the board and far more than that in solar," said Michael Liebreich, New Energy Finance's chairman and CEO. Levelised costs for solar energy, or the lifetime cost per kilowatt hour before government subsidies, will drop this year, with thin-film solar power generation rates falling to as low as $3 per watt, the report said. Chinese and European solar power companies were upbeat about next year, saying last week that demand for clean energy systems was rebounding after a dismal 2009. Wind turbines have dropped to their lowest level in several years, shedding 18-20% of their cost in 2009, New Energy Finance said, adding that equipment prices could be offset by higher construction costs as developers build in deeper waters. Geothermal energy rates also eased as low oil prices caused many drilling rigs to sit idle, meaning more equipment was available. Geothermal uses underground hot water and steam to spin turbines and generate electricity.