WHEN the Reagan administration removed the solar panels from the White House roof, slashed the federal budget for renewable energy research by nearly 90 percent and sent warships to protect oil-shipping lanes in the Persian Gulf, the course of United States energy policy seemed as straight as a smokestack: more of the same and very little support for alternatives to fossil fuels and nuclear power. The 1980s were not a happy time for those advocating the "soft energy path."But today the sun is shining brighter, the wind blowing more favorably for renewable energy, conservation, and greater efficiency in energy-using devices to lessen the need for dwindling resources that pollute. * Technologies have greatly improved. Declining costs are making such energy sources more economically competitive. * Utilities (prodded by new state regulations) are realizing they can make a profit not only by producing electricity, but also by designing and marketing conservation measures for homes and businesses. * The Gulf war has made it clear that fossil fuels are not only finite but dangerous to rely on. * State and local governments and some federal agencies (like the four-state power planning council here in the Pacific Northwest) are placing new emphasis on saving energy over building new generation plants. * And the Bush administration - which is pushing for new oil drilling and nuclear power development - is recharging the federal government's renewable energy and conservation efforts. "Renewable energy has enormous promise for clean and abundant supplies," says Assistant Secretary of Energy J. Michael Davis. "Hydropower, biomass, and waste-to-energy technologies are mainstream contributors, and wind, geothermal, and solar thermal facilities are becoming increasingly viable." In arguing for the administration's 1992 renewable energy budget, Mr. Davis cited its inherent important advantages over nonrenewable energy: "Collectively it offers a diverse and virtually inexhaustible resource.... It is substantially less harmful to the environment.... It can contribute significantly to our economic and energy security." In fact, said Davis, "the size of the resource is orders of magnitude larger than our foreseeable demand." At present, renewables supply just 8 percent of that demand (13 percent of US electrical consumption). But a recent study by five national laboratories concludes that even without any change in policy, this portion will double over the next 40 years because of accelerating technological and economic trends. And by doubling or tripling federal research and development efforts (spending another $3 billion over the next two decades) the contribution of renewable energy sources would nearly quadruple, the go vernment white paper predicts. Duane Sunderman, director of the federal Solar Energy Research Institute (SERI) in Golden, Colo., is even more upbeat about the potential for renewable energy. By increasing R&D and overcoming constraints such as storage capacity during those times when the sun doesn't shine or the wind doesn't blow, the contribution could increase tenfold, he says. "There is a distinct possibility, over the coming decades, that we will develop storage capabilities with high-temperature superconductivity or hydrogen," predicts Dr. Sunderman. "The resources are unlimited and wait only upon technological progress for harvesting." In congressional testimony earlier this year, Sunderman noted some recent accomplishments of SERI research: "Airfoils that can increase the energy output of wind machines by as much as 30 percent, photovoltaic [PV] devices with world-record efficiencies, an innovative method for making thin-film devices that could greatly reduce the cost of PV modules, concepts that extend solar thermal energy well beyond electricity to a variety of industrial applications, and new methods for making high-quality, high-t emperature superconductive materials." Arthur Rosenfeld, University of California physics professor and director of the Center for Building Science at the Lawrence Berkeley Laboratory, points to tangible benefits already realized from government-sponsored research. New energy-efficient windows coated with low-emissivity glazing that keep heat in, he says, have saved $3 billion worth of energy since they were introduced in 1981. Six million dollars in Energy Department funding for such windows and also for high-frequency ballasts used in compact fluorescent lamps already has saved almost $4 billion and could save $82 billion in energy costs a year with full market saturation, Dr. Rosenfeld told the House Committee on Science, Space, and Technology in April. That's because 25 percent of all heating and cooling requirements in US buildings makes up for unwanted heat loss and gain through inefficient windows. To put those figures in terms of the consumer, government studies show that high-frequency ballasts in fluorescent lamps can save $92 over their 10-year life span, compact fluorescent lamps save $28, and small low-emissivity windows save $60. The cost of generating electricity from the sun is dropping dramatically. Luz International of Los Angeles, which designed, built, and now operates the world's nine largest solar electric systems, in the last five years has brought the cost per kilowatt hour down from 24 cents to 8 cents - less than new nuclear power plants and within a few cents of the average nationwide cost per kilowatt hour from coal-fired power plants. The Union of Concerned Scientists and other boosters of renewables say that when the hidden costs of radioactive waste disposal, nuclear power plant decommissioning, and pollution and global warming caused by fossil fuels are factored in, the price of energy from the sun becomes even more competitive. Such results led the authors of the national laboratories white paper to conclude that "the ultimate role of photovoltaics may be far larger than most assume." Similar progress has been made in the cost of wind energy (now 7 to 9 cents per kilowatt hour) and biomass (6 cents), according to the Energy Foundation, a San Francisco-based organization that promotes efficiency and encourages greater use of renewable resources. "Forestry, agricultural, and municipal wastes, if efficiently collected and converted to energy, could probably supply up to 7-9.5 percent of current US energy consumption," concludes a report by the Union of Concerned Scientists. "The potential of energy farms [short-rotation hardwood trees and other fast-growing plants] is more difficult to assess, but is probably in the range of 8-22 percent." While new technologies to supply more energy tend to get the most attention, it is activity on the demand side that may hold the most potential. From the initial "oil shock" in 1973 through the 1980s, more "new" energy was obtained through efficiency than all other sources of supply - seven times as much, says Amory Lovins, research director for the Rocky Mountain Institute and energy consultant to many utilities, government agencies, and businesses. While the US gross national product grew by 46 percent over that period (including 20 million new homes and 50 million more vehicles), energy use rose just 7 percent. "New technologies, most of the best less than a year old, can save twice as much electricity as five years ago, at a third the cost," says Mr. Lovins. Will Uncle Sam keep the push on for renewable energy sources and conservation? For 1992, the Bush administration wants to spend 27 percent more on energy conservation research than it is spending this year. "The need for improvements in the efficiency of energy use has never been more clear," states an administration document. It makes the same apparently supportive statement for "abundant, secure, and environmentally-benign energy sources." But unlike last year, when a 26 percent increase was sought and Congress bumped that up to 42 percent, the administration this year is asking for just 2 percent more for research on renewables. But assistant energy secretary Davis stresses that there are "some significant increases imbedded within that number 10 percent more for photovoltaics, 42 percent more for biofuels (ethanol and methanol), and 26 percent more for wind. Compared with the days when the Reagan administration pretty much wiped out the program, this does represent a new direction.