What happened

Alternative energy stocks had a rough week in the stock market. That included solar company SunPower (SPWR -3.17%) as well as hydrogen fuel cell companies Plug Power (PLUG -3.11%) and Bloom Energy (BE -3.22%). Early in the final trading day of the week, these stocks are down between about 6% and 8% from last Friday's close, according to data provided by S&P Global Market Intelligence.

So what

The macroeconomic environment is weighing on these stocks, and it hasn't just been this week. In the last three months, SunPower shares have dropped 25%, while Plug Power and Bloom Energy have tanked 40% and 31%, respectively. But this week some analysts chimed in, and these names continued to drop. 

When SunPower reported its first-quarter results on May 5, CEO Peter Faricy said, "Demand is accelerating as consumers look to solar as a more stable, secure and sustainable energy source." The company's residential solar sales jumped 41% year over year, and it held a record backlog. The company still reported a slight loss of $2 million, however. 

Now what

Some analysts now think that growth in the solar business is at a turning point and that things for SunPower are about to get worse. Wells Fargo analyst Michael Blum put out a report on Wednesday saying he believes the slowing housing market, along with unsupportive U.S. solar policy, will cause a slowdown in the residential solar market. 

Several metrics are showing that new-home construction is slowing. Blum sees that fact, along with a slowing economy, as resulting in a decline in SunPower's business, reports Barron's. Blum also cites government policies that aren't helping the sector. 

While President Biden has said his administration won't impose any new tariffs on solar panel imports for two years, existing tariffs are being enforced, hurting domestic solar companies, Blum argues. There is also the possibility that solar investment tax credits that expire after next year won't be extended. 

Other renewable energy company stocks like Plug Power and Bloom Energy are also counting on government support. Both fuel cell companies are working to grow business in hydrogen power. Until Plug builds out its network of green hydrogen production, however, it relies on natural gas for fuel. Elevated natural gas prices are going to cut into its profit margin, according to a J.P. Morgan analyst report from this week. 

Support from the bipartisan infrastructure law seems more certain for the hydrogen sector, however. Earlier in June, the Department of Energy announced the launch of the $8 billion program identified in the infrastructure law to build clean hydrogen regional hubs throughout the country. But the law calls for that investment over a five-year period (through 2026). And while it plans for the development of at least four hydrogen hubs, uncertainty remains, as it doesn't address the demand side. 

In the current environment of high inflation, rising interest rates, and a slowing economy, the prospects for rising demand for alternative energy solutions have become more questionable. Investors are shifting away from names like SunPower, Plug Power, and Bloom Energy as a result.