Solar energy costs will drop by half in 2009, while other low-carbon technology costs will see presubsidy costs drop by 10%-20%, according to renewable energy analysts.

Prices for renewable energy equipment, including wind turbines and solar panels, fell this year, but they were offset by higher financing costs in the wake of the global economic slowdown, according to New Energy Finance.

“As capital markets loosen up and equipment prices continue their decline, we will see the levelised costs decline, finishing the year 10% below the end of last year across the board and far more than that in solar,” London-based New Energy Finance’s chairman and CEO, Michael Liebreich, told Reuters.

Levelised costs for solar energy will drop in 2009, with thin-film solar power generation rates falling to $3/W, according to the report.

Geothermal energy rates have also eased following low oil prices that lead to idle drilling rigs and more available equipment.

The US, Europe, China and South Korea lead global renewable energy spending plans with about $500bn investment in green technologies to stimulate their own economies.