Battered by more financial market fallout, the gloomy week ended with General Electric on Friday announcing a big profit boost from its energy business in the third quarter.

GE said the profit from its energy-technologies business, which includes wind turbines, smart-grid products and solar panels, jumped 34 percent to reach $1.1 billion in the third quarter from the year-ago period. Profit from the company's energy-financial services jumped 21 percent to reach $306 million while financial services in real estate and most other sectors posted losses.

The giant firm doesn't break down its earnings for its myriad activities in renewable energy. Overall, GE reported earnings of $4.3 billion, or 43 cents per share, for the third quarter. The earnings declined by 22 percent, but diluted earnings per share fell only 20 percent from the same quarter in 2007, thanks to the performance of the company's financial-services segment. GE's third-quarter revenue rose 11 percent to reach $47.2 billion.

The U.S. stock markets began a deep dive on Monday, as investors saw the $700 billion bailout plan from the federal government as an inadequate measure to prop up a crumbling economy. Solar stocks suffered alongside the financial markets, seeing double-digit declines, influenced partly by worries that companies won't be able to raise the millions of dollars they will need to build factories and power plants (see VCs to Solar Startups: A Deal You Can't Refuse).

Even First Solar (NDSQ: FSLR), long admired by investors for its ability to make good money by making thin-film solar panels cheaply, hasn't been immune to the market crisis.

The company sells panels for about $2.50 per watt - about 40 percent lower than the average selling prices today - while making them at a cost of $1.09 per watt, according to Lazard Capital Management. That gives First Solar the highest profit margins in the industry. 

But its shares dropped nearly 20 percent on Tuesday when Goldman Sachs downgraded the stock from "buy" to "conviction sell" a day after the Tempe, Ariz., company said it had broken ground on a new factory in Ohio.

Analyst Michael Molnar at Goldman, which reduced First Solar's price target from $365 per share to $103 per share, said in a research note that solar companies might produce a bumper crop of solar panels in 2009, a scenario that will likely cause the governments of Germany and Spain, the two largest solar markets, to shrink their solar-electric subsidies amid a global economic downturn.

The two governments have required utilities to buy solar energy at higher prices than conventional electric power, creating a boom for solar-equipment makers and installers in Europe, the United States and Asia (see Spain Approves 500MW for Solar and Solar Prices Set in Germany).

The stock markets continued to fall on Friday, with the Dow Jones Industrial Average plummeting nearly 700 points at the start of the trading.

Lazard Capital Markets analyst Sanjay Shrestha has reduced price targets for 11 solar stocks.

In recent trading, First Solar's shares fell nearly 7 percent to reach $110 per share. Other key solar companies trading on U.S. exchanges, including SunPower, GT Solar, Evergreen Solar, LDK Solar and Suntech Power, saw their shares drop by as much as 13 percent in recent trading Friday.

The crisis has spread worldwide.

Germany solar equipment maker Schott Solar called off its €500 million ($741 million) initial public offering after staging a dramatic on-again, off-again discussions about whether to follow through with it (see Schott Solar Shoots Down IPO).

France, Germany and Austria on Friday called for the European Union to scale-back plans to curb greenhouse gas emissions and fight global warming, which could have a devastating effect on the greentech industry if it happens.

These countries, along with Poland and other EU members, fear that EU's proposals to make heavy industries, such as steel and chemical makers, pay for polluting will cripple businesses already facing a weakening global economy. The EU hopes to cut carbon-dioxide emissions to 20 percent below the 1990s levels by 2020.