Based on federal and state experience of the late 1970's and early 1980's, this paper examines various policy alternatives that government could implement in promoting renewable energy. The paper assumes that government has an interest in promoting renewables. Therefore, it makes no attempt to advocate why federal or state governments should promote renewable energy. It merely presents a variety of options that these governments might choose to promote renewables as a viable alternative to meet present and future energy demands. The Carter and Reagan administrations at the federal level and the Brown, Deukmejian, and Wilson governorships in California are examined. This time period was selected because of the significant changes which occurred during the 1970's and 1980's in the energy economy and political arena and their resulting impact on the renewable energy industry. The contrast between one decade and the next starkly revealed the effects that government policy had in both cultivating and undermining a relatively infant industry. The thesis presents a detailed case study of Luz International to illustrate those effects. The discussion focuses on the factors affecting the policy formulation process, with emphasis on the importance of the executive office, interest groups, and the legislature. This thesis argues that energy policy formulation is governed or shaped largely by factors that are beyond the control of the renewable energy industry. Examples of such factors are benefit coalitions, short-term mentality of elected officials, and lack of public awareness. Effective policy to facilitate the commercialization of renewable energy technologies must account for the conditions of the marketplace and the political process. / Master of Urban Affairs