SOLAR ENERGY drives the earth's wind currents and water cycle and is stored in vegetation. Progress is being made in harnessing each of these indirect sources of solar energy. Wind Power

The air that envelops the earth functions as a vast storage battery for solar energy. Winds are generated by the uneven heating of our spinning planet's land and water, plains and mountains, equatorial regions and poles.

The windmill played an important role in American history, especially in the Great Plains where it was used to pump water. More than 6 million windmills were built in the United States over the last century, and about 150,000 still spin productively. Prior to the large-scale federal commitment to rural electrification in the 1930s and 1940s, windmills supplied much of rural America with its only source of electricity.

Judging from the experience of the federal wind energy effort, one might be misled into thinking that harnessing the wind is an outrageously expensive proposition. A 100-kilowatt wind turbine at Plumbrook, Ohio, cost $4 million --$40,000 per kilowatt of capacity. A 2,000-kilowatt turbine being built by General Electric in Boone, N.C., on a cost-plus contract is currently expected to cost $16 million -- or $8,000 per kilowatt. But these early efforts were highly instrumented, and their construction was riddled with errors. "We're getting smarter as we get older, I hope," says Lou Divone, head of the federal wind research effort.

Some parts of the private sector are already fairly smart. A privately funded, 200-kilowatt wind turbine on Cuttyhunk Island off the Massachusetts coast was built for just $280,000 --owatt hours of electricity last year at an average cost of 5.3 cents per kilowatt hour. A Northwest firm sells 275-kilowatt and 600-kilowatt wind turbines for $400 to $480 per kilowatt (uninstalled). And Tvind, a college community in Denmark, has designed and built a massive 2,000-kilowatt wind turbine for $660,000 -- just $330 per kilowatt including installation.(Local laborers worked for living expenses rather than salaries, while specialized outside laborers were paid regular rates.) This is roughly 2 per cent of the cost per kilowatt of the 2,000-kilowatt GE wind turbine in North Carolina. At the Tvind price, wind-generated electricity is cheaper than just the cost of fuel for an oil-fired power plant. Falling Water

In the United States, hydroelectric development has for four decades focused upon huge projects. We now have 12 dams with capacities of a million kilowatts or more. Small facilities of the sort employed extensively by Japan, Switzerland, Sweden and China have remained largely undeveloped in America. Of the nearly 50,000 existing dams over 25 feet in this country (built mostly for recreational, agricultural and flood control purposes), only 800 are licensed to produce power. An Army Corps of Engineers report last year estimated that 54 million kilowatts -- more power than we now get from nuclear power -- could be harnessed simply by installing turbines at dams that already exist. This may be the cheapest undeveloped source of electricity in America today. Plant Power

All fossil fuels were once green plants. Existing technology can harvest "energy crops" directly, without waiting hundreds of millions of years for nature to convert them into oil, gas and coal. Dry cellulose contains about 60 per cent as much energy as coal -- and the hydrocarbons produced by some plants actually contain more.

In addition to being burned directly, biomass can be transformed into useful fuels in many ways. Some of these were developed by the Germans to cope with the petroleum shortages of World War II. Today, several of these technologies are being pursued much more vigorously abroad than in the United States.

Last December, President Carter examined a biogas plant in India. Observing that this simple, cheap technology converted sewage, animal dung and agricultural wastes into methane, the President joked that it might not be too late to include such devices in the energy bill now deadlocked in Congress.It's no joke. In the last three years, China has built 4.3 million biogas plants. The United States, by comparison, has fewer than 100.

Biomass can also be converted into alcohol. Brazil recently embarked upon a $400 million program to produce ethanol from such "energy crops" as sugar cane and cassava --substitute home-grown ethanol for all imported gasoline before the year 2000. Brazil is thus the only country in the world that is consciously building a transportation system for the post-petroleum era.

In the United States, alcohol produced from agricultural wastes is now comparable in price to gasoline, and "gasahol" (gasoline mixed with alcohol) is now being sold commercially in several Midwestern states.

Biological energy sources are of many kinds, and their prices vary accordingly. The wastes of the forest products industries are their cheapest potential energy sources.Many other industrial processes also have large waste streams that could be tapped. An ohio factory that makes truck axles has installed a pyrolitic incenerator to burn paper and other organic wastes. Enough energy is recaptured to meet the total heating and cooling needs of the 290,000-squarefoot facility.

Converted to such liquid or gaseous forms, organic fuels can be readily substituted for those fossil fuels -- oil and natural gas -- that are in shortest supply. The potential biomass harvest in this country could yield more energy than is now derived from imported oil.