SIOUX FALLS, S.D. » It was a home run, a grand slam, a dream come true or the biggest birthday present ever for the solar industry, depending on who you spoke with.

But these are not normal times and the reality of the global economy collided with what should have been a day in the sun for solar companies.

President Bush signed off on an eight-year extension of solar energy tax incentives last week, providing the long-sought stability for the burgeoning industry. A $2,000 reimbursement cap for home solar projects was wiped away and for the first time, utilities get a tax credit, too.

Before the champagne went flat, however, solar's Wall Street nosedive had outpaced the overall market drop.

“;The sector is being driven by macro forces right now and not by company fundamentals,”; said Jesse Pichel, an analyst with Piper Jaffray.

First Solar Inc. shares have fallen nearly 30 percent since the closing bell the day before the vote. Shares of Ja Solar Holdings Co., GT Solar International Inc. and SunPower Corp. are down more than 30 percent, and Suntech Power Holdings Co. Ltd. fell nearly 20 percent.

Suntech is under a $678 million contract with Kapolei-based alternative energy company Hoku Scientific Inc. to purchase polysilicon - used to make solar panels - from its planned Pocatello, Idaho, plant. Hoku has contracts with five solar companies totaling more than $2 billion.

Hoku is set to start commercial polysilicon shipments in early 2009 and plans to increase capacity from 3,500 to 4,000 metric tons a year.

Its shares have traded between $14.88 and $4.02 in the last year, with shares closing on the Nasdaq Stock Market at $4.05 yesterday.

The renewable industry depends on equity as well as credit to complete projects, and the credit market has frozen. Without access to capital, solar companies may cut back on expansion plans and look to Asia to produce solar panels, Pichel said.

There are already signs of a scaleback.

BP Solar this week scrapped plans for a $97 million expansion of its Frederick, Md., plant citing intense global competition. And China-based Yingli Green Energy Holding Co. said it has no plans to boost its manufacturing capacity once it reaches 600 megawatts next year.

Wall Street for years has worried about an eventual oversupply of solar modules, but Pichel said that hasn't been a worry of his.

“;If you do get oversupply, that just means that the panel price is going to come down,”; Pichel said. “;And if the panel price comes down, it's going to be that much more attractive to put up solar. So you should get an elastic response.”;

Many people are already looking beyond the financial meltdown.

Joseph Muscat, Ernst & Young's Americas director of cleantech and venture capital, said that Congress lifting of the exemption for utilities will likely spur utility-scale solar projects.

“;I think a lot of people were sort of sitting on the sidelines who would fund some of those projects,”; Muscat said. “;And I think they're going to come back to the market here pretty quickly.”;