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Solar prices dropping fast

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Michael Goulding/The Orange County Register/NEWSCOM/FILE

(Read caption) Workers for SolarCity install photovoltaic panels on a California home.

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The price of solar panel systems has been plummeting, making installation more affordable for homes and businesses but potentially spelling trouble for manufacturers.

Last week, the San Francisco Chronicle cited a study [PDF] by the Lawrence Berkeley National Laboratory, which examined the costs of installed photovoltaic systems on homes and businesses nationwide, not including the sizable state and federal tax credits or financial incentives. They found that the average price fell from $10.50 per watt in 1998 to $7.60 per watt in 2007, a decline of 3.5 percent per year in real dollars.

As Greentech Media notes, the Berkeley Lab researchers found that the price drop had little to do with the cost of the photovoltaic panels themselves, and more to do with falling costs of labor, solar inverters, and marketing.

And experts say its only getting cheaper. CNET's Green Tech blogger Martin LaMonica notes a study by Photon Consulting, a Boston company that advises solar manufacturers, that predicts that the cost of a producing (as opposed to a buying and installing) solar power systems will reach $1 per watt by 2012.


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