Thursday, October 22, 2009 at 2:11:37 PM - by Danny Vo

The cost of solar energy installations decreased between 1998 and 2008, a Lawrence Berkeley National Laboratory study reveals.

The lab, operated by the Department of Energy, noted that prices dropped in 2007 and 2008 thanks to lower prices for photovoltaic (PV) components.

Solar system cost decreases between 1998 and 2007 were attributable to other factors like lowered labor costs, researchers say.

Small PV systems saw the steepest reduction in price, good news for homeowners considering solar panel installations. But, thanks to the achievement of economies of scale, large installations cost less in watt terms - $6.50 per watt versus residential costs of $9.20 per watt.

And researchers say that cash incentives for generating solar energy have declined, driving up the net cost of solar panel systems. But for residential installations, net cost only increased 1 percent between 2007 and 2008.

The lower cost of PV components is a boon to those interested in solar technology for their home or business. The solar industry, anticipating an upswing in demand, has been increasing manufacturing capacity in recent years - which should lead solar energy systems to continue getting cheaper.