The United States and Germany started out with very similar policies for renewable energy after the energy crisis of the 1970s. By the year 2000 they were on very different policy paths and, as a result, the German renewable energy industry has moved well ahead of that in the United States, both in terms of installed capacity in the country and in terms of creating a highly successful export market. In this paper, we reject some of the conventional explanations for this difference. Instead, these differences arise from the intersection of contingent historical events with the distinctive institutional and social structures that affect policy making in each country. Our analysis of the historical path-dependent dynamics of each country suggests that those who wish to further renewable energy policy in the United States need to take into account these institutional and social factors so that they will better be able to exploit the next set of favorable historical circumstances. (C) 2009 Elsevier Ltd. All rights reserved.