Although Matthew Patsky's job is to study windmill and clean- coal technologies for Winslow Management, a U.S. money manager dedicated to environmentally friendly investments, his biggest concern right now is the price of oil.

A 16 percent drop in the price of crude from its high in 2006 could portend further declines, reducing demand for renewable- energy equipment like solar-power cells from SolarWorld of Germany and wind-turbine generators from Suzlon Energy of India. Their shares soared when oil rose 40 percent in 2005.

"There are cycles to oil prices that directly influence renewables," Patsky said. "While right now it's favorable, the situation could easily reverse. I do believe we will see $100-a- barrel oil. I just think we'll see $45 a barrel first." The Bloomberg world energy-alternative sources index, which tracks SolarWorld, Suzlon and 13 other stocks, has jumped 30.7 percent in 2006, reaching a record on March 3. At the same time, crude prices in New York this year have averaged $63.42 a barrel, up 32 percent from last year.

SolarWorld shares are up 91 percent this year, the biggest gain in the alternate energy index. Suzlon has risen 43 percent, more than doubling since its initial stock sale in October. Among the competition, Ballard Power Systems, a Canadian fuel-cell maker that has not posted a profit since 1998, is up 40 percent this year. Evergreen Solar, a U.S. maker of solar cells, has climbed 47 percent.

Companies in the index trade at an average of 58 times projected earnings and 6.6 times sales. Stocks globally sell for 18 times estimated earnings and 1.3 times sales, based on Morgan Stanley Capital International's world index. The MSCI benchmark is up 3.9 percent this year.

The valuations indicate that investors have become too enthusiastic about alternative-energy stocks, said the hedge fund manager Andrew Abrams of Abrams Investment Partners in New York.

"These can be very pie-in-the-sky stocks with lots of noise and very little actually being done," he said. "When they're in their cycle, which it looks like they are now, they get tremendously inflated. Nobody cares as soon as oil breaks back below $40 a barrel or so." Renewable energy accounts for just 5.5 percent of the primary fuel supplies used by the 26 member nations in the International Energy Agency.

Among alternate energy stocks that have soared and later tumbled: AstroPower, a maker of electric solar-panel systems for homes and businesses whose shares traded as high as $36 in May 2001, filed for bankruptcy court protection in February 2004, and Plug Power, a maker of fuel cells, which trades at $4.59, against its May 2001 high of $35.40

The industry's shares are getting a lift from more than just the higher prices of oil and natural gas. Countries also are investing in alternative energy to reduce emissions of greenhouse gases. The International Energy Agency in Paris, an adviser to oil-importing nations, last month estimated that its members had spent $27.4 billion on renewable-energy research and development in the past 30 years to create a total of about 500 gigawatts of installed electric generation capacity.

Still, Patsky said his firm's $220 million Winslow Green Growth Fund had reduced its holdings of alternate energy stocks to 20 percent from a high of 25 percent, anticipating a decline in the price of oil. The fund has returned an average of 11 percent a year the past five years, compared with 2.6 percent for the Standard & Poor's 500 stock index.

The firm holds Fuel-Tech, a maker of pollution-control technologies; Evergreen Solar, a maker of solar cells; and Zoltec, a maker of carbon fibers used in windmill blades. "They are selling all they can make and are making money," Patsky said.

Winslow also runs a $27 million hedge fund with short positions, or bets that shares will fall, in some alternate energy stocks that Patsky declined to identify.