How much subsidy should solar energy receive

In this paper, we analyze the rationale for providing federal financial subsidies for the development of solar energy. Various justifications for subsidies are discussed, including parity with present subsidies for conventional energy sources, economic externalities, tax law biases, and foreign policy considerations. It is found that, while a substantial level of government financial incentives for solar energy development can be justified, a quantification of the level of incentives is difficult to achieve. The implications for U.S. energy policy are discussed.