Prices for rooftop solar systems fall as supply grows

Here's a bright spot in an overcast economy: Solar panel prices are tumbling.

Prices for rooftop solar systems, including installation, already have fallen 8% to 10% since October and are expected to drop another 15% to 20% this year.

Fueling the trend are an oversupply of worldwide manufacturing capacity and lower demand, especially in Spain and Germany, which have been growth engines for the industry.

For U.S. homeowners, effective prices are likely to plunge by more than 50% after figuring in a bigger federal tax credit that took effect Jan. 1.

"The era of extremely expensive (solar) modules is over," says analyst Nathaniel Bullard of research firm New Energy Finance. …