Perhaps the most meaningful government support for solar power in America is found in the state of California, where the state government subsidizes solar installations for new and existing homes and businesses. The use of taxpayer money to fund solar purchases undeniably encourages the adoption of solar energy for some consumers, and speeds the growth of the solar industry due to more sales. Nonetheless, policies like the one in California may not be the best use of government funds.

Government subsidies are not enough for solar to reach the critical consumer mass it needs to drive down costs and gain mainstream adoption. Solar is unlikely to become a meaningful energy solution for the country at large if such policies become the standard model for state encouragement of solar power. Observers need only look to Germany to see the limitations of direct government subsidy, where a solar-favoring tariff is draining enormous governmental resources with only one-to-two percent nationwide adoption. Direct governmental assistance gets quick results, but at a great cost and at the expense of using money that could instead be fueled towards far more significant solar energy growth in the long term.

Instead of assisting in the purchase of solar power, state governments should instead subsidize the technological research of solar power manufacturers, particularly the makers of solar panels. Presently, such research is disappointingly under-funded, even as solar panel sales are rising. According to the The New York Times, in 2007, the DOE intends to spend a total $159 million on R&D for solar power. In contrast, the funds available for nuclear-energy research will top $300 million, while funds spent on coal are expected to reach $427 million.

Transitioning the taxpayer investment towards R&D will help speed up the process of lowering the production cost and increasing the efficiency of the components of solar installations, which will eventually allow the price of solar to be attractive to consumers—mainstream consumers, and not just early adopters—without governmental assistance in the purchase. The government can provide the most overall benefit, in the most efficient manner, through this course of action, rather than through haphazard subsidies on an individual level. While the government’s role in the solar industry should not be limited to funding—there is also the matter of regulation—a more sensible financial policy from state governments in the solar arena will produce great benefits for American society at large.