Solar costs could fall below 50 cents a watt by 2017

Solar panels are as cheap as they’ve ever been, and according to Lux Research the costs of producing solar modules, which make up solar panels, will also continue to fall. It needs to for some of the solar manufacturers to survive.

By 2017, solar modules could cost below 50 cents to produce, says Lux. They are as low as 70 cents per watt now. The lowest costs will be for solar modules made from thin film solar panels of cadmium telluride, particularly the kind made by First Solar (s FSLR). Modules made of copper indium gallium (di)selenide, or CIGS — a lot of startups developing CIGS have struggled to reach commercialization — could reach 64 cents per watt to produce by 2017.

The cost will drop partly because of manufacturing efficiencies, but also because of the efficiencies of the modules themselves. Startups and big companies alike are looking to make their cells more efficient as a way to sell lower overall costs of the system, and survive the difficult price environment of the last fours year.

Due to an overcapacity boom, and subsidized solar manufacturing, many solar makers are operating at a loss, being forced to sell solar cells and  modules for rock bottom prices. There will no doubt be even more consolidation and the companies transition through the overcapacity.