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NEW YORK - Alternative energy has long been dismissed as too expensive to be practical, but with oil hovering around $65 a barrel, solar energy and fuel cells are starting to look positively affordable. As a result, alternative fuel companies' stock has soared this summer alongside oil prices.
While equipping your house with solar panels will almost certainly pay off in time, alternative energy stocks are riskier.
Most alternative energy stocks are thinly traded and several don't have a lot of cash.
But with Hurricane Katrina shutting down an estimated 5 percent of the nation's oil refining capacity, which will send gasoline prices even higher, alternatives look viable.
For 2005, energy expenditures in the United States are expected to be $1.08 trillion, approximately 24 percent above the 2004 level, the Energy Information Administration, a division of the U.S. Energy Department, reported Friday.
That's good news for Spire Corp., maker of solar cell manufacturing equipment. Since June, its stock has doubled.
But the financials are more worrisome at some of the more advanced wind energy and fuel cell companies, Timothy Woodward, Chairman of Evergreen Solar Inc., said.
''The potential is there, but the demand is not as big'' as it is for solar energy, he said. "The cost to make the products often exceeds the price customers are willing to pay for them.
''Those companies, you're making an investment in the future, so the volume is there when there will be enough demand to help them come down the cost curve,'' Woodward said.