02:28 AM EST on Friday, December 24, 2004

MULHAUSEN, Germany

A SOLAR-POWER project built by a Berkeley, Calif., company may point Germany toward a pollution-free future.

Set in the heart of Bavarian farmland, the 30-acre facility went online this month, becoming the biggest solar-energy plant in the world.

For the government of Chancellor Gerhard Schroeder, the Muhlhausen solar farm represents a gamble that Germany, the third biggest economy, can replace its principal energy sources -- coal, natural gas, oil and nuclear power -- with clean, safe and renewable alternatives.

"There's a huge amount of opportunity here in Germany because the government has created a system that encourages large installations," said Thomas Dinwoodie, chief executive of PowerLight Corp., of Berkeley, which built and operates the Muhlhausen facility and two other solar parks nearby.

Germany's approach is being closely watched by officials in California and elsewhere as a possible model for developing renewable energy.

PowerLight's three Bavarian solar parks, consisting of 57,600 silicon and aluminum panels, will generate 10 megawatts of electricity -- enough to power 9,000 German homes. The amount of electricity produced is much less than power plants fueled by coal or natural gas, but with very low operating costs, the solar project is expected quickly to turn a profit while emitting zero pollution.

Schroeder's left-of-center Social Democrat-Green coalition has turned Germany into the world leader in renewable energy since it took office in 1998. The equivalent of billions of dollars have been spent on wind and solar projects, and Schroeder, in a politically risky move, has sharply increased taxes on petroleum products in an attempt to reduce consumption of conventional fuels.

The campaign accelerated a year ago when Germany enacted a law forcing electric utility companies -- and, ultimately, all electricity users -- to pay higher rates to businesses or individuals who generate solar or wind energy and feed it back into the grid. With this guarantee of revenue, solar panels have become commonplace on new German houses and huge new windmills are a typical sight in rural areas, especially in the more windy north.

"This is part of our commitment as a government, to make Germany the world leader in alternative energy and in taking action against global warming, " said Juergen Trittin, Germany's environment minister. "We are willing to do what is necessary."

The country is now the No. 1 producer of wind energy, with more than 16,000 windmills generating 39 percent of the world total, and it is fast closing in on Japan for the lead in solar power. Wind and solar energy together provide more than 10 percent of the nation's electricity, a rate that is expected to double by 2020.

It has become a profitable business, too, with about 60,000 people employed in the design and manufacture of wind- and solar-energy equipment.

Energy analysts and industry executives alike say that California, which leads other U.S. states in renewable energy development, is looking to Germany as a laboratory of what works and what doesn't. Yet even Germany's chief booster of renewable energy warns that the lessons are mixed.

"This has a political cost," said Trittin, who cheerfully admitted in an interview that he is "probably one of the less popular" politicians in the country.

According to recent polls, close to 80 percent of Germans support the government's strategy of promoting renewable-energy sources and its staunch advocacy of the Kyoto Protocol's obligations to reduce emissions of greenhouse gases.

Public support is markedly less, however, for the other key element of the government's anti-oil program. Under a separate law enacted in 1999, gasoline taxes are increasing by 3 euro cents per liter per year -- about 15 U.S. cents per gallon -- provoking howls from commuters and truckers.

"The German people broadly support alternative energy, but Trittin has pushed the limits of that support," said Michael Kohlhaas, an energy-policy analyst at the German Institute for Economic Research, in Berlin. Increasing numbers of Germans are even finding the ever-present windmills an eyesore.

"Opposition to wind farms is growing fast, but none of the major political parties are prepared to listen to voters' concerns," said Hans-Joachim Mengel, a political-science professor at Berlin Free University. "They are ideologically committed to wind as a source of alternative energy and don't want it questioned."

Robert Collier writes for The San Francisco Chronicle.