The sky giveth. And the sky taketh away.

For the last six years, researchers studying whether solar cells are the holy grail of electrical utilities have been unable to overcome the technological and economic obstacles that keep solar energy consigned to the margins of the nation's energy mix.

"I don't think people understand how difficult it is to take things out of the laboratory and make them commercial," said Brian K. Farmer, project manager of the venture, Photovoltaics for Utility Scale Applications.

Technical problems have plagued some types of solar cells that are being tested side by side in the arid Sacramento River delta. Even the most mundane conditions have been shown to reduce the effectiveness of photovoltaic cells, the silicon wafers that convert sunlight into electricity.

Airborne dust and dirt can reduce output by as much as 15 percent - a significant loss for conservative utility planners. Heat - the unavoidable byproduct of sunny summer days - also reduces the efficiency of solar cells.

What's more, the glass-covered panels routinely collect more than sunlight from the sky. Several have been destroyed by stray bullets from a nearby firing range, said Paul A. Hutchinson, an engineer at the facility.

More than just bullets fall from the sky. Birds also fly over, and their deposits on the modules have been "one of our biggest problems," he said.

All told, the project that began in 1987 to demonstrate that solar technology might be ready to join the ranks of fossil fuels as a source of bulk electricity has shown, instead, that a new generation of solar cells needs to be developed before the nation can hope to harness the sun on a large scale.

"The bottom line is we have not met expectations," said Mike Pulscak, an official in the U.S. Department of Energy's solar division in Washington.

Unable to generate dependable power at a competitive price, the two major project sponsors - the U.S. Department of Energy and Pacific Gas & Electric Co. - are considering pulling the plug on the $18 million endeavor.

The support of big utilities such as Pacific Gas is considered crucial to improving solar's contribution to the nation's energy supply. Wind, geothermal and solar energy together provide less than three-tenths of 1 percent of the electricity sold by utilities, according to the Energy Department.

Several other large California photovoltaic plants, built in the early 1980s when federal solar tax credits were available, have been dismantled and their modules sold. Even the more optimistic solar advocates say utility-scale applications are unlikely before 2010.

Utilities now are reassessing their strategy with an eye toward installing solar panels in smaller configurations to provide "grid support" - auxiliary power at vulnerable points in the distribution system.

Atlantic Electric Co. plans to install a 50-kilowatt solar array to shore up service at the end of its distribution system in Cape May. The solar panels - which provide enough power to supply 25 homes - will double as a rain canopy over a passenger walkway at the Cape May-Lewes ferry.

On Tuesday, Delmarva Power & Light Co. will dedicate a 15-kilowatt rooftop solar system at its operations center in Newark, Del. The project will demonstrate that solar power can be stored in batteries for later use, after the sun sets.

And Pacific Gas & Electric has built a 500-kilowatt addition next to a substation in Kerman, Calif. The project, which provides supplementary power during peak demand periods, helped the utility avoid the cost of building a new transmission line to serve the area.

The grid-support project in California cost about $10,000 a kilowatt (half of it paid by the federal government). That's five times more expensive than utilities usually pay for new generating capacity.

"It's a proof-of-concept plant," said project manager Farmer, who oversees solar projects for Pacific Gas. "We don't really expect the plant will be cost-effective."

The cost of solar cells has not come down in the last decade as much as some optimists projected, and the high cost remains an impediment to widespread growth.

It costs 20.6 cents per kilowatt hour to produce electricity from photovoltaic cells - four times as much as wind generators and five times as much as combined-cycle natural-gas generators, says Pacific Gas & Electric, one of the leading utilities for solar investments.

"It's a chicken-and-egg thing," said Dick Ningard, national accounts manager for Solarex Corp., an Amoco subsidiary that operates a research and photovoltaic manufacturing plant in Newtown, Pa.

It wasn't supposed to be this way.

Twenty years ago this month, when the Arab oil embargo shocked the nation, the government began a frantic search for renewable, domestic energy supplies. Solar power was especially alluring because it was pollution free.

"This technology is so attractive, it's so elegant," said Edgar A. DeMeo, the head of solar-power programs for the Electric Power Research Institute in Palo Alto, Calif. "It just sits there in the sun and generates electricity."

Solar advocates hoped that photovoltaic cells could contribute 10 percent of the nation's electrical needs by the turn of the century.

But the federal government's commitment to solar waned in the 1980s as oil prices fell rather than rising to $40 a barrel, as projected. Congress funded less than half the $2 billion called for in a 1977 law to develop alternative sources of energy. Solar tax credits expired in 1988.

Still, photovoltaic cells have gained some commercial acceptance.

Solar cells have gradually moved into markets where conventional power sources are inconvenient or expensive, such as remote pumping stations, emergency highway telephone boxes, security lighting and vacation homes far from power lines.

Solar supporters also hope that a Clinton administration initiative announced last week to reduce greenhouse gas emissions will also spark new support for photovoltaic development.

"The markets are booming," said Scott Sklar, the bullish executive director of the Solar Energy Industries Association. Exports to developing countries represent 60 percent of the industry's sales, he said.

Sklar said five photovoltaic producers were expanding or opening new manufacturing facilities, including Advanced Photovoltaic Systems Inc. of Princeton, which recently completed a 65,000-square-foot plant in Fairfield, Calif.

Experts say the photovoltaic manufacturing process will improve slowly. "It's going to be a gradual thing, nothing too spectacular," said Ningard of Solarex.

The key ingredient to photovoltaic cells is pure silicon, which is expensive to manufacture. (The silicon in a solar cell reacts with the photons in sunlight to produce a small trickle of electrons, which is collected by wires running through the cells. The trickles from hundreds of cells combine to form a stream of electricity.)

Most photovoltaic panels are made from crystalline cells, which are produced by a labor-intensive process of forming a block of pure silicon and then slicing it into thin wafers. The method is inherently expensive, and the cutting wastes a lot of silicon.

The more promising process, they say, is the production of amorphous cells - so named because the silicon molecules are jumbled rather than rigidly structured, as they are in a crystalline cell.

Amorphous cells are cheaper to produce - gaseous silicon is applied to glass in a layer only a few atoms thick. But they are less efficient, requiring more surface area to generate the same amount of electricity.

The cost of the cells is only part of the equation. Half the cost of installing a solar system pays for the frames to point the cells at the sun and for wires and transformers to convert the energy generated by the cells into 120-volt household current.

At the Davis facility, where the 400-kilowatt Advanced Photovoltaic System array alone consumes five acres, the different techniques to improve efficiency are evident.

Some manufacturers have devised mechanical tracking devices that rotate the cells so they follow the sun from morning to sunset. Hutchinson, the engineer, says the devices improve efficiency so long as they do not malfunction, which they often do.

Other photovoltaic producers have designed mirrors to concentrate the sunlight on cells, allowing them to produce more electricity from smaller cells.

But perhaps the most telling evidence of the checkered performance of photovoltaic manufacturers are the three sets of empty frames awaiting a new generation of cells.

None of the manufacturers was able to deliver the cells on time this year. "Their contracts were terminated," said Hutchinson.

Some solar advocates say the uncertain future for huge solar generating stations may not be such a bad thing, because much of the appeal is for individual electricity users who want to place the generating capacity on their own rooftops.

"Central stations aren't what we're all about," said Paul D. Maycock, a Virginia energy consultant and the editor of Photovoltaic News. "Who needs it?"

Some utilities are already anticipating the day when customers seek energy independence and are positioning themselves to sell stand-alone photovoltaic systems.

The Idaho Power Corp. is spending $5 million to install photovoltaic systems for remote customers rather than extending electrical distribution lines into virgin territory.