YORK, Pa. — For a state with energy- production roots drilling deep into the coal mines and oil fields, the time has arrived for a heavenward look to try to harness the power of the sun.

Gov. Rendell last week signed a bill here dedicating $650 million to the development of alternative and renew­able energy, with a whopping 28 percent going to solar energy.

Environmentalists and energy-policy ex­perts say the fund is a significant investment in clean energy and will boost Pennsylvania-profile as a leader in emerging ener­gy technology.

The bill makes a historic investment in solar energy, an emerging technology that Rendell administration officials compare to the status of wind energy six years ago. The legislation provides $100 million for solar power and water-heating systems on homes and small businesses, pay­ing up to 35 percent of the installa­tion cost. It also provides $80 mil­lion for larger, commercial-scale projects.

Kate Marks, energy program di­rector with the National Confer­ence of State Legislatures, called the fund a "leading investment in renewable energy" that demon­strates how states, not the feder­al government, are taking the lead.

Under the law, Pennsylvania will borrow $500 million over the next two years for grants and loans to attract businesses in the alterna­tive-energy field and help existing companies improve energy efficien­cy.

A separate $150 million loan pro­gram will offer rebates to homeown­ers to weatherize their houses or install solar panels, and provide subsidies for low-income homeown­ers who need assistance with ener­gy bills.

The fund is the second part of the administration's Energy Inde­pendence Strategy, which began in 2004 with the creation of new energy markets through man­dates that utilities use alternative energy.

"We have got a bill that does so many things all in one time," Ren­dell said before signing it at a former auto-parts factory that will become a high-energy-efficiency residential and commercial devel­opment. "It's not just enough to cre­ate markets. We have to help young, fledgling businesses."

The administration estimates that since 2003, when Rendell took office, the state has invested $1 bil­lion in alternative and renewable energy and as many as 3,500 jobs have been created.

Energy-policy experts could not identify a similar-size fund and said it was impossible to compare with investments in other states that may be larger but covered a num­ber of years.

For instance, New Jersey has handed out $227 million in rebates to businesses and homeowners for solar systems in the last seven years.

The bill was passed as part of the state budget negotiations after a long-sought compromise with Sen­ate Republicans, who opposed Ren­dell's original $850 million proposal because it depended on more bor­rowing and a monthly fee on utility bills.

Business interests object to such large government subsidiza­tion of what they call "unproven" technologies and the Rendell ad­ministration's apparent favoritism toward "green" companies. David N. Taylor, executive director of the Pennsylvania Manufacturers' Association, said his group had op­posed the bill as "profoundly mis­guided."

"If we want to hasten the arrival of the next generation of energy breakthroughs, we need a pro- growth environment where re­search and development can take place," he said. "We can't mandate it into existence or subsidize it into existence."

Roy Kienitz, Rendell's deputy chief of staff, disputed the notion that wind and solar technologies were not proven, and said the tar­geted investment in those areas was part of Rendell's long-term vi­sion to shift the state's economic focus.

"Pennsylvania was at its pinnacle 100 years ago with steel, oil and railroads, but employment in those industries has declined by 50 or 75 percent," Kienitz said. "We have to set our economic investment in finding growing industries like bio­tech and renewable energy."

Maureen Mulligan, a solar-indus­try lobbyist, called the fund the "ma­jor jump start the industry was look for in order to invest in Pennsyl­vania."

The commercial funding, in par­ticular, could be used to attract manufacturing that would create jobs and provide local products, which keeps shipping costs down.

Catherine Neil, one of the owners of Heatshed, a solar-installation company in Bucks County, said ho­meowners were hungry for the new technology.

A typical system providing half a household's electricity costs about $35,000.

Rebates at the upper limit of 35 percent would be $12,250. So with $100 million, that kitty could prompt more than 8,000 systems.

Philadelphia's Andrew Kleeman, with the solar-power company EOS Energy Solutions, agreed that the demand was there, but said he didn't think the $180 million was enough to give the industry the full- throttle boost it needed.

"I think it's a great step," Klee- man said. "The total dollars sound like a huge amount. It's really not."