Solar energy has experienced phenomenal growth in recent years due to both technological improve-
ments resulting in cost reductions and government policies supportive of renewable energy
development and utilization. This study analyzes the technical, economic and policy aspects of
solar energy develop- ment and deployment. While the cost of solar energy has declined rapidly in
the recent past, it still remains much higher than the cost of conventional energy technologies.
Like other renewable energy technologies, solar energy benefits from fiscal and regulatory
incentives, including tax credits and exemp- tions, feed-in-tariff, preferential interest rates,
renewable portfolio standards and voluntary green power programs in many countries. The emerging
carbon credit markets are expected to provide additional incentives to solar energy deployment;
however, the scale of incentives provided by the existing carbon market instruments, such as, the
Clean Development Mechanism of the Kyoto Protocol is limited. Despite the huge technical potential,
the development and large scale deployment of solar energy technologies world-wide still has to
overcome a number of technical, financial, regulatory and institutional barriers. The continuation
of policy supports might be necessary for several decades to maintain and enhance the
growth of solar energy in both developed and developing countries.