An Economist Looks at Solar Energy: The Government\u27s Role

Abstract

The economist speaks in terms of free enterprise, and of competition. This most pure state of economic existence, where all economic textbooks begin, is a rare occurrence in the real world, however. The energy market is a notable example of how government involvement has skewed consumer choices. This is as it should be, for we expect the public decision making process to involve more than just considerations of economy. This paper will place solar energy in the context of a marketplace for energy, and justify the role of government in influencing solar energy market development and market penetration. It will also examine the concept of commercialization, the effect of government incentives, and the proper timing of government involvement

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