It was going so great for a while. Investors were eagerly pouring cash into renewable energy stocks as solar and wind energy seemed the perfect answer to the looming energy crisis. The more the news became grim and gas prices went up, the more investors fled to companies like First Solar (NASDAQ: FSLR), driving the stock to over $300 a share in the spring and summer of 2008. Today, the stock closed at $115.75 and has hovered in the low 100s for past few weeks.

This climate has changed, all right: it's changed to "fear." No longer are investors content to contribute to long research & development cycles for unproven business models; nor are they satisfied that credit will be available to finance the major capital expenses which accompany wind and solar energy systems. The world may be sinking ever faster into an energy crisis, but it's the financial one that matters far more to opportunistic investors -- and with a recent drop in demand, industry watchers are concerned prices may not hold up to mid-2008 expectations. According to green fund manager Chris Walsh, quoted in a Reuters article, "There are too many players out there, and there are too many smaller players."

In my opinion, while the best-performing alternative energy stocks were certainly pricey in early summer, the downturn they've taken is shortsighted. The recent plunge in oil prices (and let's remember it's a plunge only compared to the newly-set benchmark of 2008) won't last for more than a few years, at most, if worldwide oil production models are correct; and then alternative energy sources will gain renewed interest from investors; making it a likely long-term bet.