Much emphasize is put on technology as driver for economic growth as well as an inevitable component in strategies to deal with environmental problems. In particular, technological change towards renewable energy is seen as a key element for a decarbonization of an economy and to address climate change. For a proper assessment and treatment, technology and technological change need to be understood from an engineering perspective, as well as from an economic perspective, including its inducement, its process of development and diffusion, and its effects on different actors.The target of this thesis is threefold. We first aim to identify the important aspects of technology and technological change from a general economic perspective and their treatment in different economic theories. Second, the focus is put on electricity production from solar photovoltaic (solar PV) technology, as it has the reputation of a renewable electricity technology with a high future potential. We want to understand the characteristics and development of the technology from an engineering and economic perspective. The third aim is to assess the capability of the economic model framework of computable general equilibrium (CGE) to capture the different aspects of solar PV technology.The first two targets are elaborated by reviewing the literature. The economic perspective is given in a historic as well as recent treatment of theories. We also structure the prevalent approaches to model technological change in an economic environmental setting by its inducement in the types of exogenous and endogenous technological change.The engineering perspective on solar PV technology is imparted by an overview of the basic functional principles of the technology and the implications for the electricity system when the technology is applied decentralized or in large scale power plants. Although the low emissions from the use and the renewable characteristic of the technology are in favor of solar PV, the temporal and spatial (mis-)matching of the supply of solar radiation and the consumer demand for electricity needs to be addressed. For the economic perspective we show the historical development and recent trends on the market of solar PV. We find the growth of global installed solar PV capacity followed an exponential pattern over the last 30 years with a doubling of installed production capacity each two years. At the same time the costs for a unit of installed capacity constantly declined. Estimations therefore project solar PV technology to achieve cost competitiveness (grid parity) for a large share of world regions until 2020. For the treatment of the third target, we set up a structured outline of modeling possibilities (including specific modeling tasks) for the installation, the electricity system, policy considerations and technological change in a computable general equilibrium model. We carry out a scenario analysis with international cooperation for a large scale solar PV grid between Europe, Middle East and African regions and show the effects on welfare, capital and labor income. We find a general positive effect on welfare from solar PV electricity exports from Middle East and African regions to Europe for each of the regions. Furthermore, we find that regional differences in income shares between capital and labor have important implications for the effects of solar PV installations on the income from capital and labor in solar PV producing countries.