All the usual suspects are in the game: big-name venture capital firms, investment banks, private-equity firms, energy companies, technology companies, individual investors, a new batch of investment companies focused primarily on energy, and even a hedge fund or two.

There are lots of recognizable names, as well, including Google founders Larry Page and Sergey Brin, Microsoft founder Paul Allen, and Sun Microsystems founder and ex-Kleiner Perkins partner Vinod Khosla.

On the public side, shares of First Solar have seen a Google-like rise to more than $300 since the company's November 2006 IPO. That translates to a $22 billion market cap on quarterly sales of just $200 million. At least it's profitable, but the price-to-earnings ratio of 100 is stratospheric in today's market. Incidentally, members of the Walton family (of Wal-Mart fame) own roughly 49 percent of the company.

GT Solar, on the other hand, raised $500 million less than two weeks ago in the nation's biggest alternative-energy IPO to date. But the stock is floundering, and the vultures are already circling around several securities class action lawsuits.

On July 21st, GCL Silicon Technology filed a registration statement with the SEC for an even bigger $863 million public offering. The Hong Kong-based company was founded just two years ago.

Still not convinced that it's a bubble? Let me explain how this kind of thing works.

When VCs smell a hot market, they fund a bunch of companies in that space and hope one or two make it. It's a numbers game. Sometimes they hit it, most of the time, they don't, but if they spread their fund around a bit, it usually pays off.

Now multiply that model by a few dozen VCs, throw in a host of corporate, institutional, and individual investors, and voila, you've got dozens of companies that are very well funded.

But that doesn't mean the market demand will support all those companies--and all the capacity they need to bring online for their business models to work. The principals of all those alternative-energy companies know that, but that won't stop them from doing what they're doing.

Still, no matter what they say publicly, they know they have to nail their strategy and business plans, if they hope to survive an eventual shakeout.

The magnitude of the shakeout will be proportional to the gap between market demand and supply. In the case of the dot-com bubble--which also included Internet and telecommunications infrastructure, fiber optics, and communications chips--the shakeout was huge, affecting the public markets by almost a trillion dollars. The nanotech bubble, on the other hand, has been largely localized to the VC community.

As for the nature of this particular bubble, I'm not sure if my crystal ball is better than anybody else's, but my gut tells me that we're already getting way out ahead of ourselves.

As bubbles go, I think this one's going to be big. How big? You got me. But I think that global warming, alternative energy--and solar energy in particular--like Al Gore are all overblown. The energy crisis, on the other hand, is real, but nuclear energy's the answer. And that's all I'm going to say about that here.

What does all this mean to you? It depends on your risk profile. If you're young, I say you need to take risks. Should a great opportunity arise with one of these companies, by all means, go for it. But if you have a good job with a good company, or you don't have enough working years left in you to take significant risks, I wouldn't jump ship for a hot solar start-up or bet too much of your portfolio on one of these deals.

You don't want to end up like Icarus, who got a little too exuberant and flew too close to the sun. Wings melt, bubbles burst--same result.

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