First Solar Inc. announced it reduced its manufacturing cost for solar modules in the fourth quarter to US $0.98/watt, breaking the $1 per watt price barrier that the industry has been striving towards in recent years.

“This achievement marks a milestone in the solar industry’s evolution toward providing truly sustainable energy solutions,” said Mike Ahearn, First Solar’s CEO. “First Solar is proud to be leading the way toward clean, affordable solar electricity as a viable alternative to fossil fuels.”

First Solar began full commercial operation of its initial manufacturing line in late 2004. From 2004 through today, manufacturing capacity has grown 2,500 percent to more than 500 megawatts in 2008. First Solar’s annual production capacity will double in 2009 to more than 1 gigawatt, the equivalent of an average-sized nuclear power plant. These escalating volumes have been accompanied by a rapid reduction in manufacturing costs.

From 2004 through today, First Solar’s manufacturing costs have declined two-thirds from over $3/watt to less than $1/watt. First Solar said it is confident that further significant cost reductions are possible based on the yet untapped potential of its technology and manufacturing process.

“This represents a major milestone for the solar industry,” said Ken Zweibel, director of the Institute for the Analysis of Solar Energy at The George Washington University. “In order to address climate change in a meaningful way, we need energy technologies that are affordable, scalable and have a low environmental impact on a life-cycle basis. With this announcement, First Solar continues to demonstrate the ability of thin film PV technology to provide an alternative to traditional fossil fuels and for solar power to provide a meaningful contribution in addressing climate change.”