The energy crisis of 2001, high prices for gas and electricity and worries of climate change have caused a growing awareness about energy issues in California. The problems are clear. This paper looks at the next step of finding and implementing solutions. In this case the contribution that solar photovoltaic and solar thermal generation could make toward solving the problem. This paper looks at technological change, the current state of solar energy research, current government policies on solar energy, and finally makes policy recommendations to meet the stated problem.