Despite plowing billions of taxpayer dollars into the ailing U.S. renewable industry, there's been little sign of new life in the sector, says the head of one of the largest manufacturers in the business.

And without a federal mandate requiring an increasing percentage of electricity to come from renewable sources such as wind and solar power, the U.S. industry is likely to remain in a funk for at least another year, said Randy Zwirn, president of Siemens Energy, a unit of Siemens AG (SI).

"There's no surge in order activity," since President Barack Obama signed into law a nearly $800 billion economic stimulus package, said Zwirn in a telephone interview. The bill included around $15 billion in tax credits for the renewable industry, and tens of billions of dollars in grants, loans and loan guarantees.

Siemens - an international engineering, electronics, energy and health-care conglomerate - maintains one of the biggest global market shares of wind generation manufacturing, is a major competitor in the solar sector and builds almost a third of the components in U.S. power plants.

Although there's billions of dollars in renewable energy production tax credits available, many of the biggest financiers have limited tax liabilities in the current economic woes to offset, "and I'm not sure in the next year or two how much tax appetite is going to be," he said.

"Financing is still pretty difficult to come by...and a lot of our customers have cut back on capital expenditures due to the financial crisis," Zwirn said.

The company's biggest U.S. customers are firms such as Florida Power & Light Co. (FPL), Iberdrola SA (IBR.MC) and American Electric Power (AEP). Some of Siemen's biggest competitors in generation, transmission and renewables are General Electric (GE), ABB Ltd. (ABB), and Gamesa Corp. Tecnologica (GAM.MC).

Share prices for many publicly traded renewable companies have plummeted and remain relatively grounded. For example, the Market Vectors Global Alternative Energy fund, which traded at a high of $62 in October last year, have fallen to around a one-quarter of that level, trading around $16 a share this week. Invesco's PowerShares Global Wind Energy Portfolio has dropped from a high of near $30 late last year to around $10 recently.

Siemens itself has seen its share price fall from around $160 in late 2007 to around $56 a share this week.

The key problem is demand. With an economy still in the depths of a recession, electricity consumption has fallen or remained flat in many areas. There's also little incentive for renewables to compete with natural gas generation, which is much cheaper right now than wind or solar projects.

Adding to the list of challenges to Obama's pledge to double renewable energy production by 2012 is a massive transmission shortage. Companies won't build expensive high voltage lines needed to connect wind and solar projects to the demand centers unless the renewable projects are approved, and those projects won't get okayed without new transmission. Getting those lines sited, financed and built is a process that can take years.

Zwirn is also skeptical about a massive influx of new transmission investment, despite more than $11 billion in direct funding for the industry and billions more in loan guarantees in the recovery bill.

"Do we really expect in the short term there will be a large number of (grid) projects that are shovel-ready?," he asked. "No, I don't think so."

Obama and his team have pledged to double renewable energy production by 2012, vowing economic recovery funds would stimulate job growth in the near term with many "shovel-ready" projects coming online once the financing is in place. Industry officials say to renovate the entire national grid would take several hundred billion dollars.

Furthermore, Energy Secretary Steven Chu is making energy efficiency one of his highest priorities, which, if successful, will stunt the need for generation growth even further.

"With both the market and economic factors...the environment is not very good," Zwirn said.

In the face of such weak growth prospects and in an effort to cut greenhouse gases, Congress is focused on artificially creating demand.

Although the House has passed a renewable portfolio mandate last year and could pass another bill that would require 25% of the country's power to come from renewables by 2025, the Senate has been a major roadblock for passage of a standard.

Despite a larger majority in the Senate, Democrat leadership still faces legislative challenges from a number of southern Democrats whose in-state utilities are opposed to a federal mandate. The leading proposal would require a 4% standard in 2012 up to 20% by 2021. A certain chunk of the portfolio can be met through energy efficiency measures, but many opponents want other types of generation, such as nuclear power, that also has low greenhouse gas emissions.

Administration officials say allowing other forms of low-carbon generation would dilute the competitiveness of wind, solar and other renewable projects. Facing opposition, Democrat leadership is considering wrapping energy and climate provisions into a controversial budget bill that could allow them to pass legislation into law with only a marginal majority.

Zwirn says he thinks prospects for passage of a renewable portfolio standard are mixed: "I would say 2010 is a better year."

By Ian Talley, Of Dow Jones Newswires, 202-862-9285; ian.talley@dowjones.com