The cost of solar power is dropping, numbers from Solarbuzz are showing. U.S. panel prices have fallen 4 cents since December to $4.81 per watt of peak capacity, while European panel prices are down 6 euro cents to €4.62 per watt.  Industry insiders are saying that prices are back to where they were five years ago. And some are predicting prices could plummet as low as $2.40 per watt.

According to Solarbuzz, the lowest prices have reached $3.57 per watt for a thin-film panel, $3.89 per watt for a monocrystalline panel and $3.99 per watt for a multicrystalline panel.

Lux Research predicted nearly a year ago that the solar market would become saturated and that solar supply would exceed demand in 2009.

“While oversupply in the solar market has been looming for some time, the correction has been more aggressive due to the economic crisis,” Lux senior analyst Ted Sullivan said in a release.