"Funding has stalled," says Ezra Green, chief executive of Clear Skies Solar Inc. The New York company recently canceled plans to build a one-megawatt solar plant in California's Mojave Desert, unable to get financing even though a California utility agreed to buy all the output.

"We've canceled the solar-panel order," Mr. Green says.

Hobbled by the financial crisis, power companies across the U.S. are slashing capital budgets and canceling projects for clean electricity. Financing for new nuclear power plants appears shaky. And some energy companies are even having trouble satisfying their short-term needs for cash.

Forging a new energy future by creating vast amounts of wind, solar and, possibly, nuclear energy is one of Mr. Obama's highest priorities. But enacting that policy depends to a large degree on the ability of energy companies and utilities to finance the massive new investments that would be needed. With many of those companies cutting spending, a lot of those investments are being pared back or eliminated.

Just a few months ago, the energy sector was riding high, reaping strong profits from rising electricity demand and higher power prices. Stock-market valuations had been climbing. Many firms had lined up loads of cheap credit that allowed them to finance major infrastructure projects.

But those conditions evaporated as the financial crisis unfolded this autumn. Stock-market valuations plummeted. The slowing economy ate into the demand for electricity. Power companies, the third largest borrowers after the government and the financial-services industry, could no longer rely on mountains of cheap credit.

Many energy companies now are having trouble rolling over debt and have drawn down bank lines to keep enough cash on hand to avoid being thrust into unfavorable financial markets. Calpine Corp., a Houston power generator, for example, is hoarding cash to give it protection until 2011. Its stock has fallen 60% this year.

Some of the first things these companies have trimmed are renewable power projects that were supposed to be the vanguard of the country's new energy future.

Clear Skies, which canceled its Mojave Desert project, has slashed its 2008 revenue projection to $3 million from $10 million and now is lining up projects with utilities in Greece and India.

Duke Energy Corp. cut in half a planned $100 million investment in which it would lease space on the roofs of homes and businesses. The plan is to erect solar panels Duke will own to feed electricity directly into the grid. Under pressure from regulators worried about costs, however, Duke scaled the project back to about 4,000 roofs in North Carolina. Duke also is pulling the plug on a $400 million wind-power project it planned to build with a partner.

Public Service Enterprise Group Inc., New Jersey's largest utility, said it is cutting next year's capital-expenditure budget as much as 15%, with up to 40% of the cut coming from renewable energy. "These are difficult markets and so we're adjusting our spending patterns," says Ralph Izzo, chief executive of PSEG, Newark, N.J.

FPL Group Inc., one of the country's biggest producers of wind power, said it is cutting capital spending for wind-energy projects by nearly $1 billion next year, reducing the capacity of the planned projects by 27%.

And one of the nation's biggest utilities, American Electric Power Co. plans to cut capital spending by 23% to about $2.6 billion next year, with more than half the cuts in environmental spending. It plans to delay installation of pollution-control scrubbers on power plants in Arkansas, Texas and Oklahoma.

Traditionally, one of the biggest drivers of renewable energy in the U.S. had come from small companies, which develop wind or solar projects and then sell the output to big utilities. The projects were attractive investments because many qualify for tax credits. But many investors who had been seeking tax breaks have disappeared as the stock market tanked and the credit markets froze.

John Eber, head of renewable energy investing at JP Morgan Capital Corp., said his firm invested $1.7 billion and raised another $2.8 billion for 43 wind farms and a solar project from 2003 through last year. But some of the biggest names, including Wachovia Corp., Lehman Brothers Holdings Inc. and American International Group Inc., have dropped out.

Equity investments in renewable projects may drop 20% this year to about $4 billion, Mr. Eber estimates.

Even plans to build a new fleet of nuclear reactors face an uncertain future. After a decades-long dormant period, many power companies have been lining up to take part in a U.S. revival for nuclear power, an important part of reducing carbon emissions.

But the prices for steel, concrete and plant equipment have risen just as utilities' ability to finance them has become constrained. Interest costs have increased to two to four times what they were a couple of years ago, greatly inflating the ultimate price tag for the big, lengthy projects.

Progress Energy Inc. has filed an application with the Nuclear Regulatory Commission to build two new reactors in Florida at a cost of about $17 billion. But the company, which has utilities in the Carolinas and Florida, is worried it might lack the heft to swing the financing.

"I don't want to find out," says Progress CEO Bill Johnson. He plans to find partners to share the risk and expense and hopes bank financing will thaw by the time financing is needed.

Many utilities had hoped that the Department of Energy would ease the financing uncertainty by guaranteeing loans. But the department so far has agreed to back only $18.5 billion of the $122 billion in requests for nuclear-reactor loan guarantees.

The passage of greenhouse-gas legislation would give a boost to nuclear energy because it could push up costs for generators that burn fossil fuels such as coal. But many utility-sector executives and analysts now expect Congress to water down any climate-change legislation out of fear that it would push up electricity prices for consumers.

Rep. Rick Boucher (D., Va.) chairman of a House panel on energy and air quality, says he's received assurances from the Obama transition team that enacting greenhouse-gas legislation is the new administration's second-highest priority, after fixing the economy.

But now, facing the dislocation created by the stock market collapse and massive bank losses, Mr. Boucher thinks the new economic realities "dictate a less-expensive program."