It doesn't take long to find out who's king of the road in Freiburg. "Hey! Are you blind?" shouts an imperious cyclist as a pedestrian ambles into a dedicated cycle path. Bikes, trams and buses whiz through the center of this medieval city, but private cars are conspicuously absent. That's because for the past 20 years, this university town nestled in the Black Forest in southwestern Germany has reduced the use of cars by laying down a lattice of bike paths, introducing a flat-rate fare for all public transport, and expanding bus and tram lines. Commuters from the suburbs can easily catch a bus, tram or bike from the central train station, so more and more of them leave their cars at home.

The result: between 1982 and 1999, just over a quarter of all journeys were made by bike and 18% by public transportation, up from 15% and 11% respectively; car travel fell during the same period from 29% to 25%. Factor in the city's use of renewable energy for both domestic and industrial applications, and it's no wonder that urban planners from Brussels to Beijing are studying how Freiburg went green.

"We have a big name when it comes to the environment and alternative energy," says Dieter Salomon, the lord mayor. "A lot of people, especially from Asia, come to see what we're doing." And Freiburg is doing a lot. Some 3% of the city's electricity comes from renewable sources, such as solar and wind power. The local power company — badenova AG & Co., which is partly owned by the city — has around 8 million kW-h of solar energy capacity, enough to power some 2,000 homes a year. Salomon's goal is to raise that figure to 10% by 2010.

Freiburg's green credentials have made the city the largest solar research center in Germany, and environmental services — like installing solar panels and purifying waste water — account for 3% of all jobs in the region.

"We've got four times as many jobs in the solar-power sector than anywhere else in Germany," beams Salomon, who's a member of the Greens. Architect Rolf Disch is one of the businessmen who has benefited from that environmental focus. He ducks under a low-hanging beam as he steps out onto the roof of the solar-powered office and apartment building in the Vauban neighborhood, which he designed and which opened last week. Below him stretch row after row of brightly painted buildings with solar-paneled roofs. He points out that each unit actually produces more energy than it uses, so residents can sell their surplus power to badenova — at j0.54 per kW-h. It's another advantage to going alternative that appeals to consumers like medical technician Angelika Ewen, 51. She and her partner, Beate Grzeska, 46, an accountant, have lived in one of Disch's solar-powered homes for almost three years. Last year, they paid just j350 for all their utilities combined, including water. Plus, they earned €2,200 for the power they supplied to badenova. "We're not eco-fanatics, but it was love at first sight when we saw the house," says Ewen, "and the ecological argument was another reason to buy." Disch himself is completely sold on solar. "The idea of solar power is more widespread now," he says.

"Our customers come to us with much more knowledge and clearer ideas about what they want. I won't build traditional buildings anymore." Still, Freiburg will need to stay competitive to keep its solar industry thriving. Georg Salvamoser, founder and ceo of Solar-Fabrik AG, a Freiburg company that makes ready-to-install solar modules for home builders, says he's planning to invest in a plant that makes solar cells — but the new facility won't be built in the Black Forest. The reason: high labor costs and the lack of government financial help.

"We'd like to do it in Freiburg, but we can't," Salvamoser says. "Building a new plant costs €70 million and you can get subsidies in east Germany, Taiwan and almost anywhere else." Joachim Luther, head of the Fraunhofer Solar Research Institute in Freiburg, says cost considerations outweigh the attractions of the city's high concentration of solar know-how: "We've tried to attract some of the big solar-cell manufacturers, but it costs half as much to invest in east Germany as it does here." Freiburg's green dreams still face plenty of obstacles, but given what the city has already achieved, at least residents know that they're not just tilting at windmills.