The United States has not joined the Kyoto Protocol to cut greenhouse gases, but the pact nevertheless is boosting sales for American companies that market "clean" energy technologies.
The spread of renewable-energy standards -- particularly in Europe -- propelled by the treaty, along with a surge in oil and gas prices, has triggered a boom in business for solar and wind energy companies.
When Solar Integrated Technologies Inc. opened an office in Germany last spring, for example, the salespeople were allocated enough solar roofing material to provide one megawatt of power. In six weeks, they were sold out. Within a month, they had orders for 16 megawatts more.
"It's a no-brainer to do business in solar in Europe," said Jon Slangerup, chief executive of Solar Integrated, whose 120 employees are producing about one mile of solar roofing panels a week at a plant in South Los Angeles. "The only question is: How much can you allocate and how fast can you install it?"
For The Record
Los Angeles Times Tuesday December 20, 2005 Home Edition Main News Part A Page 2 National Desk 1 inches; 62 words Type of Material: Correction
Renewable energy -- An article in Monday's Business section about sales of "clean" energy products by American companies used incorrect terminology to describe the cost of electricity. Wind turbines can produce electricity for 4.5 cents to 5 cents per kilowatt-hour, not per kilowatt, and a new natural gas turbine project can generate electricity for 9 cents to 9.5 cents, also per kilowatt-hour.
In Germany, the world's leading solar energy market, farmers are replacing crops with fields of solar panels, thanks to a government buyback program for renewable energy that spurred 150% growth in solar installations in 2004.
Britain, France and Spain also have introduced aggressive plans to reduce their production of carbon dioxide and other heat-trapping gases over the next decade.
"Every available [solar] module is going to Germany," said Rhone Resch, president of the Solar Energy Industries Assn. in Washington. "It's Google-like growth."
A world leader in renewable energy less than a decade ago, the United States is now viewed as a laggard. At the United Nations Climate Change Conference in Montreal this month, Canadian Prime Minister Paul Martin accused the U.S. of lacking a "global conscience" for refusing to sign the Kyoto treaty, which requires developed countries to slash their greenhouse gas emissions below 1990 levels by 2012.
Craig Stevens, a spokesman for the U.S. Department of Energy, said the Bush administration recognized that climate change was a "serious long-term issue."
But he said the best way to address that concern was by developing cleaner, more environmentally friendly forms of fossil-fuel-generated energy and nuclear power.
Stevens said renewable energy would also be an "important part" of the nation's energy mix, which was why the government was planning to invest $391 million next year in solar, wind, hydroelectric and geothermal energy projects.
State and local governments don't think the Bush administration is moving fast enough. Twenty states, including California, have established standards to guarantee that a certain portion of the energy they use comes from renewable-energy sources. California is the world's third-largest market for solar energy and the nation's leading producer of wind-generated power.
The state agreed last week to spend an additional $300 million in subsidies to put solar energy panels on as many as 1 million rooftops over the next 11 years.
"California clearly has been a U.S. leader," said Ron Pernick, co-founder of Clean Edge Inc., a West Coast energy consulting firm that predicts that the market for solar photovoltaics, wind power and fuel cells will reach $15 billion a year by 2014.
Unless domestic production expands quickly, Californians hoping to jump aboard the solar bandwagon could face lengthy delays, according to solar experts. They said the strong demand from Europe had taken up much of the U.S. production.
Investors are scrambling to get a piece of the renewable-energy action, sending the stocks of California companies such as Solar Integrated and Clipper Windpower Inc. of Carpinteria soaring. Both companies are listed on the London Stock Exchange's Alternative Investment Market, where investors have shown a strong appetite for "green" companies.
Clipper Windpower was trading Monday at 287.5 pence (about $5.10) a share, up more than 100 pence since late November. Solar Integrated was at 195 pence (about $3.46), up from 175 pence in November.
Slangerup, who had just returned from a European investment tour, said governments in Europe were betting that having a strong renewable-energy base would be a competitive advantage in the future.
Solar Integrated produces a commercial roofing material that uses photovoltaic cells to produce about four watts of electricity per square foot. Though it costs more to produce a kilowatt of electricity with this method, companies can use government subsidies to offset their capital outlays. Those include a 30% federal tax credit on the cost of installation, rebates from the state and renewable-energy credits that can be used to offset fees or fines.
"You turn a roof into a performing asset that has a guaranteed energy stream over 20 years," said Slangerup, whose customers include Coca-Cola Co., PepsiCo Inc., Wal-Mart Stores Inc. and commercial real estate developer ProLogis. "It becomes a real powerful selling proposition."