According to a recent New York Times article, home solar power has been getting cheaper for years. Solar panel prices have declined 31 percent from 1998 to 2008 because of lower manufacturing and installation costs and state and local subsidies, according to a study released recently by Lawrence Berkeley National Laboratory. But it still took a ramp up in federal incentives this year to bring the cost within many people’s reach.

More than half the states in the U.S. and Washington D.C. offer generous incentives to cut the costs by 40 percent or more, according to Amy Heinemann, a policy analyst at the Database of State Incentives for Renewables and Efficiency.

How much you’ll spend depends on where you live. In New Jersey, generous state incentives can pay for more than 90 percent of a home solar system. A 5 kW solar system would drop from $37,500 to about $2,625 after applying the federal tax credit, a state rebate, and a renewable energy program through the state’s largest electric utility, PSE&G. A system that size can shrink a typical home’s electricity consumption by up to 40 percent and cut an electric bill by several hundred dollars a year. The owner would recoup the cost in roughly three years. Homeowners may never see discounts like these again. Funding in some states dwindled this year as the recession  has resulted in tightening of state government budgets.

New Jersey reduced its subsidy by half last year, though PSE&G has picked up some of those costs. With many states facing budget deficits, it is unlikely that this type of subsidy will go on indefinitely. Indeed, Massachusetts, Colorado, Maryland, Connecticut, Minnesota and Delaware have all cut theirs as well. With labor and electricity rates likely to rebound, people should do the math and determine if now is the best time to buy  a home solar power system.

For the full article please go here: http://www.nytimes.com/aponline/2009/10/21/business/AP-US-Bargain-Solar.html?cp=7&sq=cost%20of%20solar%20panels&st=cse