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Croatia has enormous renewable energy potential, particularly solar, but it is underperforming with regard to its use both for electricity production and heating. Paper focuses on the reasons therefor by analyzing the policy with regard to environment, subsidies, the role of international financial institutions, monopoly dimension of power utility companies, as well as social dimension. The author presents proposals for changing the status quo in order for Croatia to catch up with regard to securing reasonable solar and other renewable energy share in its energy supply. Apart from the state as regulator which has various instruments at its disposal to implement thoroughly the renewable energy use, local authorities should assume central role and responsibility for solarizing their territories and generating the energy locally from other renewable energy sources available on their territory. Municipal utility companies would thus add electricity production to their regular activities and could provide installation and maintenance services for individual energy generating systems within the territory of their competence. [ABSTRACT FROM AUTHOR]