The installed price of solar photovoltaic (PV) power systems in the United States dropped considerably in 2012 and into the first half of 2013—and may continue to fall.

According to the recent edition of "Tracking the Sun," an annual PV cost-tracking report produced by the U.S. Department of Energy's Lawrence Berkeley National Laboratory (LBL). In 2012, prices for both residential and commercial applications dropped by a range of roughly $0.30 per watt (W) to $0.90/W—or 6 to 14 percent—from the previous year, depending on the size of the system.

In 2012, the median installed price of residential and commercial PV systems smaller than 10 kilowatts (kW) in size was $5.30/W, while that of commercial systems of 100 kW or more was $4.60/W. Even cheaper were utility-scale systems bigger than 10,000 kW, which generally ranged from $2.50/W to $4.00/W. "This marks the third year in a row of significant price reductions for PV systems in the U.S.," says report co-author Galen Barbose of LBL's Environmental Energy Technologies Division.

On the whole, the report revealed U.S. PV prices to be higher than those of other major markets internationally. It also found that variability in prices depended on the state and type of application, system configuration, and technology. In general, however, prices have fallen as the market for solar PV systems has expanded rapidly over the past decade. In 1998, the median value of residential and commercial PV systems smaller than 10 kW was $12/W. In 2012, this value dropped to $5.30/W.