Here's a bright spot in an overcast economy: Solar panel prices are tumbling.
Prices for rooftop solar systems, including installation, already have fallen 8% to 10% since October and are expected to drop another 15% to 20% this year.
Fueling the trend are an oversupply of worldwide manufacturing capacity and lower demand, especially in Spain and Germany, which have been growth engines for the industry.
For U.S. homeowners, effective prices are likely to plunge by more than 50% after figuring in a bigger federal tax credit that took effect Jan. 1.
"The era of extremely expensive (solar) modules is over," says analyst Nathaniel Bullard of research firm New Energy Finance.
Solar consumers can reap even bigger gains if they can buy in a recession.
Until this year, homeowners who bought solar systems were eligible for a tax credit that shaved system prices 30%, but the credit was capped at $2,000. Last fall, Congress renewed the 30% credit and removed the cap, lopping thousands more dollars off solar price tags.
In California, which accounts for nearly 70% of the U.S. solar market, a typical 4-kilowatt, $32,000 solar energy system cost a homeowner about $23,000 last year after state and federal incentives. This year, if prices sink as expected, that system is likely to cost $10,000 to $12,000.
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