Montreal, Canada

Can you name the only sector tied to the natural resources complex that’s still in the doghouse in early 2011? If you guessed alternative energy, then you’re right.

A host of bad news has sent stocks in this once-thriving sector to the basement since 2008 and for the most part shares are still lingering around their multi-year lows. Solar and wind energy dominate the space and have been in a deep bear market since 2008.

There’s a host of reasons why investors have bailed out. Some are pretty compelling.

Government subsidies, mostly in Western Europe, have been sliced dramatically since 2009 amid austerity budgets; nowhere is this more evident than in Spain – home to one of the biggest subsidies in Europe. Germany has also reduced subsidies and that’s been another big blow.

The United States under the Obama election platform was supposed to give a direct boost to clean energy but barely anything has been awarded.

The Chinese are also a factor damping the sector. That’s because China is making serious inroads in manufacturing things like photovoltaic solar panels, driving a deep wedge into European and American competitors. Meanwhile, wind energy, previously dominated by the Danes, Germans and Americans, are seeing market share decline because of aggressive competition in India.

What’s amazing is that even despite near $90 West Texas crude oil and $100 Brent in London, the alternative energy sector is struggling to find investors. Trading volumes have increased somewhat since the start of the year but for the most part, institutions aren’t interested.

TAN, or the Guggenheim Solar ETF, has crashed a cumulative 68% since hitting an all-time high of $26.39 back in 2008.

The good news is that a bottom might be in the process of being formed over the last several weeks. TAN is up over 15% already this year and is definitely worth a punt for aggressive investors hunting for some value in an otherwise heavily over-bought commodity rally.