This NYTimes Green Inc. article reports a decline in cost per watt to generate solar energy. In US, it has reduced from by about $0.30.
What I found interesting is this line - "...though the actual cost to homeowners actually increased slightly as state incentives for installing solar arrays fell faster than module prices."
I remember doing a study on solar power generation during my studies. We actually realized that the installed base of wind power has increased at a far higher rate than solar in India in last 10 years or so. We concluded that while technology improvements will bring down costs, yet Government focus on this sector is very important.
Especially for a technology that is seemingly stagnant for a long period. Probably the only nation that has solar power firmly on its radar is Germany. Most other nations are allowing industry to come up with solutions that have to compete with traditional power generation.
There is a need to stimulate demand that will lead to reduction in prices. Such stimulus comes through incentives. Another way is to allow individual users to use solar tech to bypass the grid. Perhaps small steps are the way to reduce our dependence on fossil fuels.