September 29, 2004—Rana Foroohar of Newsweek reports that over the past two years, despite lots of recent media coverage about how hot the alternative energy sector is, the worldwide stock-market value of companies developing renewable energy fell from $13 billion to $10.7 billion, while the value of fossil-fuel companies surged to record highs of more than $1.2 trillion.
Foroohar attributes the lagging of the alternative energy sector to its inability to overcome the uncertainty about if and when regulations will be put in place requiring consumers and businesses to purchase specific amounts of renewable power. Meanwhile, the Bush administration is casting doubt on whether global warming will actually be problematic for Americans, and has refused to sign on to the Kyoto Protocol, an international agreement setting specific goals for the reduction of greenhouse gas emissions worldwide. And as oil prices surge around the world from tensions in the Middle East, stocks of other types of fossil-fuel companies are reaping the benefits on exchanges.
Meanwhile, individual alternative energy companies, such as Germany’s solar cell manufacturer Q Cells, continue to bask in the glow of investor adulation. Q Cells leaders hope to go public in 2005, and analysts predict the company could raise an unprecedented $1 billion at that point. But companies like Q Cells need only consult recent history to keep grounded. In the late 1990s, Canada’s fuel-cell maker Ballard Power became one of the darlings of NASDAQ; in 2000, its stock price hit $192. Today Ballard Power is trading at around $8.