Solar and wind energy are closer than ever to reaching its’ potential, despite some obvious roadblocks. One of the biggest challenges facing solar and wind energy adoption are lower oil prices. As crude oil prices have dropped significantly in the past six months, demand for alternative energy investment dwindles. Solar and wind energy have been two growth industries in recent years, although the credit crisis is currently battering them. Demand for solar panels and wind turbines had been growing at a record pace, until the financial crisis caught up with homeowners.

“I thought if there was any industry that was bulletproof, it was that industry,” said Rich Mattern, the mayor of West Fargo, N.D.

Growth in the wind and solar industries were greatest when big lenders will still making loans to homeowners. As the credit crisis worsened, this source of financing quickly dried up. Not only did the capital for home improvements dry up, but so did funding for the manufacturers of the equipment. Currently the market descriptions are described as frozen.

OptiSolar, Ausra, Heliovolt and Sun Power have all announced layoffs in recent months, which serves as a stark reminder that demand is drying up.

Building wind farms is a business with high costs and huge capital requirements. With so many lenders unwilling, or unable, to provide funds, the future prospects are dimming. Solar energy tends to require a large upfront investment from homeowners that has traditionally been provided by banks. Expecting homeowners to dig into their own savings to finance alternative energy upgrades is unlikely in the current environment.

Still, there are some signs that the growth might continue. In 2008, the US became the world’s largest producer of wind energy.

“Global wind energy capacity grew by 28.8% last year, even higher than the average over the past decade, to reach total global installations of more than 120.8 GW at the end of 2008. Over 27 GW of new wind power generation capacity came online in 2008, 36% more than in 2007. “

Now fans of alternative energy are waiting to see what the so-called stimulus plan bring the economy in the way of tax credits or increased capital. Barack Obama has promised to bring a green economy to the United States, but so far hasn’t offered details on exactly what that means. As the stimulus package makes it way through Congress, more information about alternative energy is likely to become available.