Alternative energy companies stung by tight credit

Alternative energy stocks were battered on Wall Street in 2008 as volatile commodity prices, a continuing global recession and tightening credit markets drove one ethanol company into bankruptcy protection and sent shares of others down more than 90 percent.

Wind and solar companies fared slightly better, but the worldwide economic downturn overshadowed $17 billion in new federal tax incentives that had those industries poised to take off.

“Those are the two ends,” said Joseph Muscat, Ernst & Young’s Americas director of cleantech and venture capital. “As we end the year, I think right now the challenges in the economy are weighing more heavily than those incentive programs to try to keep the industry moving along at a good pace.”

It was a tough year for stocks overall as bad bets on mortgages erupted into a global crisis that seized up credit markets.

While the Dow Jones Total Market Index and the Standard & Poor’s 500 index fell 39 percent, shares of companies like Suntech Power Holdings Co. Ltd. plummeted 86 percent and First Solar Inc. lost 48 percent of its value.

Forbes