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Study: Solar costs to drop dramatically

WASHINGTON, May 22 (UPI) -- With production levels on the rise for solar photovoltaic cells, industry analysts are predicting a rapid decline in costs.

The affordability could make solar power a mainstream option in the next few years, according to a new assessment by the Worldwatch Institute in Washington and the Prometheus Institute in Cambridge, Mass.

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Global production of solar PV cells, which turn sunlight directly into electricity, has risen six-fold since 2000 and grew 41 percent in 2006. Although grid-connected solar capacity still provides less than 1 percent of the world's electricity, it increased nearly 50 percent in 2006, to 5,000 megawatts, propelled by booming markets in Germany and Japan. Spain is likely to join as a major market in 2007 and the United States soon thereafter.

The solar industry's growth has been constrained by a shortage of manufacturing capacity for purified polysilicon, the same material that goes into semiconductor chips. But the situation will be reversed in the next two years as more than a dozen companies in Europe, China, Japan and the United States bring on new levels of production capacity.

In 2006, for the first time, more than half the world's polysilicon was used to produce solar PV cells. Combined with technology advances, the increase in polysilicon supply will bring costs down rapidly -- by more than 40 percent in the next three years, according to Prometheus estimates.

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"Solar energy is the world's most plentiful energy resource, and the challenge has been tapping it cost-effectively and efficiently," said Janet Sawin, a senior researcher at Worldwatch who authored the update. "We are now seeing two major trends that will accelerate the growth of PV: the development of advanced technologies and the emergence of China as a low-cost producer."

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