Solar system costs suddenly fall

NEW YORK, Jan. 13 (UPI) -- The cost of solar energy systems in the United States could fall sharply in 2009, industry observers said.

Barry Cinammon, chief executive officer of Akeena Solar, said wholesale prices for solar panels have dropped 15 percent since October, which would bring the prices of an installed system -- with labor costs figured in -- down about 8 percent, USA Today reported Tuesday.

Prices are falling due to a glut in the solar panel market, as Spain and Germany have dropped incentive programs that pushed solar panel production, the newspaper said.

On top of that, U.S. homeowners can benefit from the removal of a tax credit ceiling for installing solar systems.

Previously, a tax credit that dropped the price of solar systems 30 percent was capped at $2,000.

The shifting market prices and tax benefits together could drop the price of an installed system down 50 percent, the newspaper said.

"The era of extremely expensive (solar) modules is over," industry analyst Nathaniel Bullard at New Energy Finance said.