Montreal, Canada

Buy low, sell high. That’s tough advice to follow in late 2010 as investors ransack just about everything with a natural resources tag ahead of another round of Fed quantitative easing.

Three years ago, the world couldn’t get enough of renewable energy. Everything with a clean energy bent, including solar, geothermal, wind and nuclear went through the roof, until the sector peaked in December 2007. Since then, it’s been a one-way ticket to a bear market beating.

From its all-time high in 2007, the alternative energy index, as measured by the Market Vector sGlobal Alternative Energy ETF (GEX), is down a whopping 66%.

Driven from investor, darlings to pariahs, the sector has been a victim of a combination of declining government subsidies across cash-strapped Europe, financing challenges amid a credit starved industry and, in some cases, growing Chinese competition in some areas of the marketplace, compromising higher cost producers in the West.

The Obama election platform in 2008 promised a few hundred billion dollars in government subsidies and support for clean energy. But that initiative died out earlier this year and only a handful of companies in this space are making any real money.

The result is the worst bear market for the renewable energy complex since it became a staple across many investment portfolios just six years ago.

But bear markets create opportunities. The key is patience while isolating good companies with a footprint in this still viable sector, including wind and solar. Leading companies in the wind and solar space have seen their respective stock prices crushed since 2008 and remain more than 60% to 70% below their all-time highs. And some are still making money.

Nuclear has been among the strongest this year as countries worldwide introduce new nuclear energy facilities – especially in India and China.

Fossil fuels will continue to damage the environment. Carbon emissions are sky-high and the Kyoto Protocol needs to be rescued. High costs for traditional sources of energy won’t get cheaper any time soon and some sources, like crude oil, heating oil and jet fuel, will probably never see their lows again. There’s still a strong case to be made for wind, solar and nuclear energy.

The best time to scoop-up these bargains is right now when nobody is looking at the sector.  Funds and ETFs that offer diversified portfolios in alternative energy are smashed-out; one in London, coined an investment trust or closed-end fund, is trading at a 15% discount to its net asset value and trading at a three-year low.

It’s time to sniff-out the bargains. Alternative energy might be hurting but it won’t disappear.