According to a press release from the Solar Energy Industries Association (SEIA) this month, falling production costs combined with incentives and tax breaks from the Federal Government are making the solar industry one of the highest growth areas in the tech sector.

On a conference call with reporters last week, (covered by BusinessWire) SEIA President and CEO Rhone Resch said that “the cost of photovoltaic (PV) solar systems dropped 20 percent last year thanks to a mix of emerging technology efficiencies and strong federal support, including the U.S. Department of Energy’s loan guarantee program and investment tax credits. New lower PV prices will likely boost the domestic solar market from last year’s total of 1,000 megawatts of new capacity installed in 2010 to 2,000 megawatts this year.”

What does this mean for solar companies? Well according to GoSolarUSA President and CEO Tyson Rohde, it means that America is poised to rise as a leader in the up-and-coming industry. Rohde said of solar’s potential, “New innovations and government incentives have helped our industry achieve amazing growth in the last two years, even in the midst of a major recession…It’s an achievement that highlights the growing hunger in this country for green energy solutions as well as the ingenuity of American businesses.”

Having reached an industry total market cap of 6 billion in 2010, and currently employing over 100,000 Americans, many believe the solar industry is reaching a critical point in its development. With strong federal backing, rising oil prices, and an environmentally friendly image, going solar with long-term investments certainly has its appeal.

Solar Stocks to Watch: FirstSolar (NASDAQ:FSLR), SunPower Corporation (NASDAQ:SPWRA), Suntech Power Holdings (NYSE:STP).

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