The cost for rooftop solar systems, including installations, have declined 8 percent to 10 percent since October due to an oversupply of worldwide manufacturing capacity and lower demand. Prices for rooftop solar systems are expected to drop another 15 percent to 20 percent this year, USA Today reports.
New Energy projects an oversupply of nearly 4 gigawatts of solar modules in 2009, or enough electricity to supply 2.6 million homes. Adding to the supply, both Spain and Germany slashed its incentives for 2009, lowering demands for solar systems.
Barry Cinammon, CEO of Akeena Solar, told USA Today that the glut is already dragging down prices with wholesale prices falling 15 percent since October.
SunPower says it expects retail prices for its solar modules to drop as much as 20 percent this year.
For U.S. homeowners, prices for rooftop solar systems are expected to plunge by more than 50 percent after figuring in a bigger federal tax credit that took effect on Jan. 1.
Solar companies in Colorado recently said that solar panel installations have declined with the economy.