Financial risk and uncertainty are also adversely affecting solar electric development. Because solar electric plants are highly capital intensive and have high absolute capital costs per kilowatt of capacity, they are riskier than most conventional power plants. The risks are partially offset by the modularity of the plants and their short construction leadtimes, but the overall risk-adjusted cost of capital for the plants is higher than that for conventional power plants.

An associated obstacle to solar development is the way in which electric utilities conduct their resource planning. Planning and avoided-cost methods usually do not consider nonmarket benefits and costs, understating the social benefits of solar energy. For instance, the environmental benefits of using the sun to produce electricity are not usually explicitly accounted for in the resource planning process. Because the environmental benefits of using cleaner technologies are dispersed and accrue to the general public, the decisionmaking utility has no direct incentive to take them into account. Therefore, even though solar energy technologies impose little or no pollution costs on society, that benefit is generally left out of the least- cost planning process.

While consideration of environmental and other nonmarket benefits of solar energy continues to be under-stated, some utilities have recently factored them into resource planning decisions on a more consistent basis. On the other hand, new regulatory trends are threatening the utilities' ability to do so, and the near-term future of solar electricity seems uncertain in light of the impending changes.

Despite these obstacles, solar thermal and photovoltaic energy technologies continue to enjoy success in certain market niches. Solar energy is a versatile power source, and solar technologies have some unique attributes that drive their use in situations where most conventional energy technologies, and even other renewables, are either not viable or not as cost-effective. For instance, because photovoltaic modules have no moving parts to wear or break down, they can be used for extended periods of time without maintenance or intervention; because solar systems are modular, they can be easily adapted to meet a variety of power requirement; and, in general, solar power systems have no "fuel" requirement other than the sun and can operate in almost any environment.