Economic Modeling and Policy Instruments for Solar Energy Deployment: A Comprehensive Framework for Sustainable Energy Transition

The global imperative for decarbonization has positioned solar photovoltaic (PV) technology as a critical component in achieving sustainable energy systems. This study presents a comprehensive analysis of economic modeling frameworks and policy instruments essential for ex-ante evaluation of solar energy investments. Through systematic examination of three distinct modeling paradigms—least-cost generation expansion models, integrated energy system models, and macroeconomic assessment tools—we quantify the economic value proposition of solar technologies across diverse deployment scenarios. Our empirical analysis reveals a paradigmatic shift in solar energy economics, characterized by a 99.0% cost reduction in PV modules between 1982 and 2023, fundamentally altering the investment landscape from subsidy-dependent to market-competitive deployment. We identify critical barriers including financing constraints (85% importance), technological limitations (75% importance), and regulatory uncertainties (70% importance) that continue to impede optimal deployment strategies. The research contributes a novel decision-analytical framework integrating technical performance metrics with economic indicators, providing actionable insights for policymakers and investors. Results demonstrate that while solar energy exhibits substantial economic potential, successful integration requires sophisticated modeling approaches that balance theoretical rigor with practical applicability. The proposed framework addresses existing gaps in standardized evaluation methodologies, offering a robust foundation for evidence-based decision-making in solar energy development. Global solar investment reached $220 billion in 2023, representing a 175% increase from 2010 levels, with China maintaining 55% market share.