The Prometheus Institute is predicting the cost of solar panels to drop significantly by 2010. Travis Bradford, the president of the Institute, says that the price for silicon-based panels should drop to $2.14 per watt within the next two years, from the current price of $3.66. Thin film photovoltaics should drop below two dollars, to $1.81 per watt in the same time frame. It currently costs $2.96 per watt.

Right now, coal — the long time contender for ‘least expensive source of power’ — is priced at $2.10 per watt. The Prometheus Institute is effectively saying that solar power will actually become cheaper than coal in the next two years, even assuming that the cost of coal doesn’t rise. That could make for a significant incentive to convince more companies to switch to solar power.

The price forecast is based on an expected rise in silicon production. Currently, there is a shortage of silicon available for the production of solar panels.  Worldwide silicon production is expected to quadruple by 2012, making a shortage much less of a problem. The Prometheus Institute also expects that there will be more solar power available worldwide, driving the overall price down.

Photo — Now Picnic