First Solar announced that they have reached $1/watt for solar panels, within spitting distance of grid parity.

First Solar’s eventual goal is “grid parity,” a phrase that refers to making solar power cost the same as competing conventional power sources without subsidies. Right now the cost of making panels accounts for a little less than half the total cost of installation. The company estimates that it needs to get manufacturing costs down to $0.65 to $0.70 per watt, and other installation costs down to $1 a watt in order to reach grid parity—goals First Solar plans to reach by 2012.

The question, though, is whether First Solar or any other solar manufacturer would be able to handle the flood of orders that would ensue if they reached competitive cost. At that point, it comes down to a matter of having enough of raw materials. That is where the real limitations come to bear, according to a paper that will appear in the March issue of the journal Environmental Science & Technology. In the paper, Wadia and colleagues Paul Alivisatos and Daniel Kammen evaluated the global supplies and extraction costs for 23 promising photovoltaic semiconductor materials and found that the three materials that currently dominate the market—silicon, CdTe and another thin-film technology based on copper indium gallium selenide (CIGS)—all have limitations when ordered in mass. While silicon is the second-most abundant element in the Earth’s crust, it requires enormous amounts of energy to convert into a usable crystalline form. This is a fundamental thermodynamic barrier that will keep silicon costs comparatively high. Both CIGS and First Solar’s CdTe rank poorly in abundance and extraction cost, with CdTe ranking dead last in long-term potential based on current annual extraction rates.

Nanosolar also said they were able to produce their panels for $1/watt when they debuted last year.

:: Popular Mechanics