Solar photovoltaics have received government support in the form of rebates, tax credits and net metering tariff mechanisms. The intended goal of these incentives is to encourage innovation in the manufacturing and installation of these systems, which is expected to eventually help overcome the high cost barrier for the adoption of the technology. These systems have the advantages of abundant availability of the solar resource, low environmental footprint, and the possibility of onsite installation, reducing the need for additional generation and transmission capacity. Since millions of dollars have been invested in these incentive programs, there is an interest in tracking the progress in the cost and capacity installed. In the first part of this thesis, I analyzed the trends in costs and adoption of solar PV by residential and commercial customers in the city of Austin. This is accomplished by tabular and graphical analysis of data on PV installations from 2004, when Austin Energy’s rebate program started, to early 2010. In the second part of the thesis, I used technology diffusion models to analyze and forecast the diffusion of residential PV systems in Austin. Three types of models were used to model the adoption trends: Logistic growth model, Bass model without price effects and Bass model including price effects. In the final part of the thesis, I analyzed the net metering tariff mechanism in Austin and studied the difference between the current and an alternative tariff. The alternative tariff uses actual ‘grid usage’ to calculate the energy charge (cost of providing distribution service) instead of the ‘net energy consumed’ that is currently in use. Using simulated PV generation data and ERCOT load profile data, I calculated the difference in revenue for Austin Energy with the alternative tariff. The results indicate that the alternative tariff adds little revenue to Austin Energy’s energy charge revenues at the current level of penetration of solar PV. However, at a higher penetration level of PV, the alternative tariffs might result in significant additional revenue for the utility. The thesis concludes with a discussion on the possible rationale for the alternative tariff and directions for future research. / text