PV costs are decreasing by 5-10% per year. At the time of writing (early 2000), module prices are in the range 3-4 US$/Wp, and complete systems are installed for prices in the range 5-10 US$/Wp, depending on size and type. With a typical annual output between 750 and 1500 kWh per kWp installed, this translates into a kWh cost range of 0.25-1.00 US$/kWh. The steady increase in manufacturing capacity, and the continuing worldwide RD&D efforts, enable fairly reliable predictions for future costs of 2-3 US$/Wp in 2010. Ultimate ‘floor-level’ system costs are expected to be around 1 US$AVp, with kWh costs between 0.03 and 0.08 US$/kWh.

According to the EU study ‘MUSIC FM’ (Bruton et al., 1996), to which we have already alluded, the necessary price reduction for PV modules of more than a factor of four could be achieved by scaling up production by a factor of 25 compared with today’s largest plants, into a plant with a production capacity of 500 MWp/year.