Clean Energy Options Get Government Boost; Wind power now nearly as cheap as other forms; solar panels make gains.(INDUSTRY SNAPSHOT)(ALTERNATIVE ENERGY)

Byline: JED GRAHAM

With oil prices above $50 a barrel and natural gas prices at near-record levels, the spotlight is shining on renewable sources of energy.

While the industry has made great strides since Jimmy Carter had solar panels installed at the White House in 1979, renewable energy still generates less than 3% of U.S. electricity output.

This year's energy crunch has given the push for renewable energy a new head of steam -- and the trend is likely to last. The reason: new federal, state and international policies that encourage or mandate the use of renewables, or so-called green energy sources, which continue to grow more efficient.

"What's driving this is primarily supportive government policies," said Steven Taub, an alternative energy analyst at Cambridge Energy Research Associates.

Consider what happened after Congress renewed a federal tax credit for wind energy production in September. Wind farms built while that credit is in place get a credit of 1.8 cents per kilowatt hour of energy produced during the first 10 years of operation, or about one-third of their operating cost.

After that credit expired at the end of last year, the wind industry added just 30 megawatts of new capacity through July, down from 1,687 megawatts for all of 2003.