The New York Times reports that a crucial piece of the green building puzzle just got a lot cheaper:

For solar shoppers these days, the price is right. [Solar] Panel prices have fallen about 40 percent since the middle of last year, driven down partly by an increase in the supply of a crucial ingredient for panels, according to analysts at the investment bank Piper Jaffray.

The price drops — coupled with recently expanded federal incentives — could shrink the time it takes solar panels to pay for themselves to 16 years, from 22 years, in places with high electricity costs, according to Glenn Harris, chief executive of SunCentric, a solar consulting group.

The price drop can be attributed to worldwide increases in solar panel production, coupled with a global drop in demand. Polysilicon, an essential ingredient in solar panels, has increased in availability thanks to more plants making the stuff in China.        (read more)

At the same time, national government subsidies, mostly from Europe, have either held back or dropped solar panel requirements. Spain, in particular, had giant incentive programs that helped increase production of solar panels; when the solar subsidies ended (thanks to the ongoing economic crunch), the European solar panel market collapsed.

Bad news for some, but good news for green building contractors who find the high cost of solar to be their biggest long-term obstacle. (The cost isn’t necessarily tied to materials, though – Safeway reports that the increased cost of financing solar panel installations has helped slow business.)

Together with federal incentives and subsidies (the Solar Guide has a handy list of available government programs you can join), solar panels are becoming a practical option for green office managers, not a frivolous one.