How did solar energy get so cheap, and how much cheaper can it get?

In the last several years, the cost of electricity from photovoltaics has fallen to the point where it is now the cheapest source of electricity across large parts of the world. Understanding how this happened is essential to guiding future research in solar energy technology. We have conducted a detailed analysis of the technological and economic factors that led to the realization of ultra low solar electricity prices in the United Arab Emirates, Saudi Arabia, Chile, Mexico and the southwestern US. We show that the primary influences are the declining cost of hardware (PV modules, inverters, trackers) and the low cost of capital available to these projects, combined with local factors such as labor costs and reductions in soft costs.In this presentation we will demonstrate the relative impact of these factors in different locations using a bottom-up LCOE model, and discuss their likely future trends (i.e. future evolution of hardware prices, or the expected impact of interest rate variations on the cost of financing). In this way we aim to provide a "big picture" context for today's solar energy research.