RPT-IPO VIEW-Green tech cos waiting for market to open up

(Repeating item that initially moved late Friday)

By Phil Wahba

NEW YORK, Oct 19 (Reuters) - While the fast-growing alternative energy sector has offered promise as other industries suffer under a weakening economy, that will not be the case in the IPO market for solar and wind companies in the near future, with many expected to sit on the sidelines well into 2009.

After a spate of IPOs by alternative energy companies in 2007 that performed well, newcomers to the market have all but come to a complete halt. So far this year, there have only been two stock issues, both by solar energy companies: a $55 million deal in May by Real Goods Solar Inc (RSOL.O), and a $500 million IPO by GT Solar International Inc (SOLR.O) in July.

Both companies have seen their stocks slide in recent months, like most alternative energy companies this year, despite the fast growth of the sector.

Real Goods Solar is pricey, now trading at 55 times estimated 2009 earnings, while GT Solar is a relative bargain at 4.69. That compares with an average for the Nasdaq Industrial Index .IXID, of which both are members, of 9.2 times.

"It's going to be tough in the near term for alternative energy companies wanting to go public, at least until early in the second quarter of 2009," said Al Kaschalk, an analyst with Wedbush Morgan Securities.

Solar companies have been hit especially hard because of fears that prices for solar panels will fall after recently imposed limits on subsidies in Spain and Germany, the two largest markets in the world.

And while the recent $700 billion financial bailout package passed by the U.S. government included earmarks to extend tax credits for solar and wind projects, the high costs of installing solar panels in homes and businesses may prove to be prohibitive with a recession looming.

The worsening credit crisis could also put a crimp in the industry's project annual growth of 40 percent to 50 percent annually in the coming years, according to Stephen Chin, an analyst with UBS Securities (UBSN.VX).

"Solar companies trying to sell technology for very large gigawatt projects which require significant project financing are most vulnerable to the effects of the credit crisis," Chin said.

TOUGH SELLS

Still, any new deals in the sector will be tough sells.

"The solar companies have been volatile and with oil prices down, investors have been concerned about alternative technologies," said Kathleen Smith, chairwoman of Connecticut-based research firm Renaissance Capital. "And right now, people are running scared from stocks, period."

Oil prices on Thursday slumped to below $70 a barrel, a 50 percent decline since early July, and many analysts now expect them to fall further, which would make it harder for alternative energy sources to compete on costs.

Last week, German solar technology company Schott Solar (S9SG.DE) called off its planned IPO.