Solar energy can help fuel America's economic recovery and provide hundreds of thousands of jobs, provided the government continues to support the nation's nascent solar firms, Interior Secretary Ken Salazar said today.

Addressing the Senate Environment and Public Works Committee, Salazar said the U.S. must avoid the mistakes of the past.

"We have the technology," Salazar said. "But what we need to do is have the policies in place over the long term."

He noted the great growth of the American solar industry in the late 1970s, and how it was abandoned by government policymakers when skyrocketing oil prices plummeted.

"Now Germany and other countries have essentially taken the lead in terms of moving forward," Salazar said. To catch up the U.S. needs a policy in place long enough "to allow these new energy forms to get to a maturation point where they can stand on their own."

The secretary said solar power could theoretically produce 30 percent of the nation's electricity. On America's public lands alone, 23 million acres have been deemed "highly suitable" for solar energy production.

Salazar highlighted the Obama administration's commitment to developing the resource.

The U.S. Bureau of Land Management is currently processing 128 applications for commercial-scale solar systems and is 'fast-tracking' 13 of them for approval by December 2010, he said. These projects would produce 4,500 MW of power, equal to about half a dozen coal-fired power plants. They would also create 40,000 permanent jobs.

But a national solar boom, he said, would be "immense."

"It is not at all an understatement for us to talk about hundreds of thousands of jobs and in fact millions of jobs if we can move forward with the clean energy economy."

Sen. Barbara Boxer, a California Democrat and longtime environmentalist who heads the Environment and Public Works Committee, said that in California green jobs grew at three times the rate of the overall California economy between 1995 and 2008.

"It's obvious you can't outsource the installation of a solar roof or a utility-scale solar facility located in the U.S.," Boxer said.

The committee also heard from several of the nation's biggest solar firms.

Jeff Wolfe, co-founder and CEO of solar distributor groSolar, said that solar energy is "one of those unusual tecnologies that can solve a bunch of problems at once."

He said the technology has already been able to deliver American-made energy, decrease dependence on foreign oil, increase national security, decrease pollution and fight climate change.

"While it is doing all those things," solar is also churning out jobs, he said.

For instance, one megawatt of rooftop solar that gets installed creates 25 jobs—most of which are "impossible" to send of offshore," Wolfe said.

Robert Rogan, senior vice president of utility-scale solar developer eSolar, touted what he said would be the major job-creating impact of the 10,000 MW of solar facilities in the American Southwest currently under purchase agreements with the utilities.

"These projects have the potential to generate literally tens of thousands of jobs," said Rogan.

Cap on Emissions Key

A future cap-and-trade market is a key driver to spur investments in renewables like solar, industry executives and Salazar said.

"A cap on carbon emissions at the end of the day will start driving the energy supply needs of this country to these less carbon-emitting energy supplies," Salazar said.

Wolfe said that "limiting greenhouse gas emissions is one of the biggest opportunities the U.S. has ever seen."

"Other countries are hoping we sit on our hands," he said. "I hope we don’t because it will help to drive our economy."

Sen. James Inhofe, a Republican from Oklahoma and a longtime climate change skeptic, told the panel that the notion that energy companies would not invest in solar without government programs "is a myth." Citing research from the right-wing Pacific Research Institute, he said that U.S. gas and oil companies invested $121.3 million from 2000-2007 in emerging energy technologies.

Inhofe also said that the votes in the Senate for cap and trade "aren't there." Instead, Inhofe called for America to open access to untapped oil, natural gas and coal resources.

The hearing comes at a time when national cap-and-trade legislation appears to be on its deathbed in the U.S. Congress.

With the election of Republican Scott Brown of Massachusetts to the U.S. Senate last week, Democrats lost their 60-vote supermajority needed to prevent filibusters in the Senate. That puts the passage of the already controversial climate bill at grave risk.

In response, Sens. John Kerry (D-Mass.), Lindsey Graham, (R-S.C.) and Joe Lieberman (I-Conn.) announced this week that the scaled-back energy and climate bill they are working on would also promote nuclear power and offshore oil and gas drilling.

Speaking at a forum on clean energy, jobs and security on Wednesday, Kerry said, "We are simply trying to figure out what the magic formula is to get 60 votes."

"There are any number of ways of skinning this cat," he said.

However, the senator said the goal remains the same: to price carbon and create a target for the reduction of emissions.

President Obama, similarly appeared to downplay the importance of establishing an economy-wide cap-and-trade market during his first state of the union address on Wednesday night.