The Solarbuzz solar panel price index has been declining steadily since late 2008, and with a 6 percent decline this month it fell below $3 per peak watt for the first time. Prices have declined by more than a third from the period of stable prices that lasted from 2003 to 2008, and show signs of continuing to decline.
At current retail electric prices, the break-even period for a small solar installation has shrunk to as little as 20,000 hours of peak sun, or roughly 10–20 years, depending on location. That is a much better rate of return than money in the bank, which at current rates would take 30–50 years to pay back your account balance in interest. Of course, if the price of electricity goes up, the break-even period is shorter.
It is still a safer financial move to pay off a mortgage early than to install solar panels, but even that could change for some building owners if solar prices fall by another 25 percent. And considering that prices just fell by 6 percent in one month, a further decline of 25 percent doesn’t seem so far-fetched.