Abstract: In recent years the solar energy technologies has experienced phenomenal growth. The realization of technological improvements, growing public awareness of environmental issues, the economic climate and number of policy instruments have facilitated and sustained this strong interest in these technologies. Since the cost of electricity generated from solar is still expensive and also the power from renewable resources including solar is infirm power, large scale development of renewable resources did not take place and distribution utilities are also least interested to purchase power from renewable sources. This paper provides an overview of technical, economic and policy aspects of solar energy development. It reviews the status of solar energy in terms of resource potential, existing capacity, along with historical trends and future growth prospects of solar energy. The paper also focuses on the technical, economical, and institutional barriers to the development and utilization of solar energy technologies. The paper reviews existing fiscal and regulatory policy instruments to support solar energy development, indicating how successful these policy apparatus are in achieving their goals. And finally a review based on existing studies of the future prospects of solar energy supply under various scenarios in Indian restructured power sector is provided