Wind turbine prices last year fell below 1 million euros ($1.4 million) a megawatt for the first time since 2005, Bloomberg New Energy Finance said.

Global turbine contracts signed in the last six months of 2010 for delivery this year averaged 980,000 euros a megawatt, the London-based analyst said today in a statement. That’s down from 1.06 million euros for contracts signed in 2009 and a peak of 1.21 million euros in 2007 and 2008, the group said.

“Delays in project financing decreased demand for wind turbines in 2010, which translated into severe over-capacity in several markets, such as the U.S. and Spain,” the report’s author, Eduardo Tabbush, said in an e-mail. “This will hurt the margins of manufacturers and component suppliers. However, wind energy has never been so competitive.”

New wind power installations fell 7 percent worldwide last year, weighed down by depressed electricity demand in weaker nations and the difficulty faced by project developers in getting finance, the Global Wind Energy Council said Feb. 2. At the same time, it said wind power is now rapidly expanding beyond traditional “rich-country” markets.

The cost of generating wind power in the most breezy areas has fallen below $69 a megawatt-hour, which compares with $67 for coal-fired power plants and $56 for combined cycle plants using gas, Tabbush said.

All manufacturers showed “aggressive pricing,” with some contracts dipping below 900,000 euros a megawatt, New Energy Finance said. The U.S. was the lowest-priced market, with an average charge of 930,000 euros per megawatt, it said.

The researcher started compiling the index in 2009, and has since also gathered data from earlier years. Prices haven’t dipped this low since 2005 when German and Spanish incentives spurred the market, Tabbush said. Before that, prices were lower “but it was a niche market,” he said.

bloomberg.com