With environmental concerns at the forefront and global energy use on the rise, new alternatives in power production are being explored. While some of these alternatives are years away from the main stream, wind energy is emerging as both a price leader (on cost) and a preferred method of producing carbon free energy.

IN PICTURES: 10 Ways To Prepare For Nature's Worst

In 2007, wind power became the first $30 billion clean energy industry. According to a 2008 Earth Policy Institute report, one in three nations now receives a portion of electricity from wind and 13 countries use turbines to generate at least 1000 MW of power. Both Spain and Germany now generate 10% of their total energy used for consumption through wind power. The cost of wind energy has declined nearly 90% since the 1980s and the Department of Energy estimates that current wind projects will actually produce cheaper electricity than conventional power plants by 2010. With this in mind, the future market for wind power seems robust and warrants further investigation. (For more, see Top 10 Green Industries.)

Thinking Small
While most investors wanting to participate in the wind sector often focus on conglomerates such as General Electric (NYSE: GE) and Siemens (NYSE: SI), or wind-based utilities such as Vestas Wind (OTC: VWDRY.PK), there are other ways to profit from this important expanding industry. A cursory glance at the First Trust Global Wind Energy ETF (NYSE: FAN), the leading ETF in this category, shows a varied mix of companies. Some of the more interesting are those that provide the equipment necessary to build and erect these structures. By placing bets on these companies, investors can profit regardless of the end user.

A Few Picks from the ETF
With nearly 3500 MW of installed power using its CONCYCLE converters, Woodward Governor (NASDAQ: WGOV) is becoming the go-to company for utilities to adapt wind systems to their power grids. By making the equipment that's needed to turn the turbine's kinetic energy into electrical energy, Woodward is providing an absolutely essential part of the wind energy chain. The company also provides various other power generation and power transmission equipment and could be a big winner from the recent stimulus package. The company reported a 38% decrease in second-quarter profit due to restructuring charges, but did raise its guidance for full year 2009. The stock trades at a measly 13 times earnings and pays a 1.1% dividend.

A wind turbine is a fairly complex piece of machinery, much like an automobile engine. To that end, we often find auto parts suppliers as players in the wind industry. While the recent crisis in the auto business has hurt Federal-Mogul's (NASDAQ: FDML) share price, the company's wind prospects remain vigorous. Federal's large custom bearings and seals are fast becoming the industry standard. The company has been struggling as of late, due to its automotive history, reporting a $1.02 per share loss. Standard and Poor's also recently cut the company's rating due to concerns of lower auto production and weak consumer spending. However, the growth in its industrial division and the green shoots of the economy might make this one an interesting speculative play.

Emerging Market Opportunity
With its expansion into China and India, American Superconductor Corporation (NASDAQ: AMSC) is poised to profit from the growth in these emerging markets. As a wind farm engineering consultant, as well as being a manufacturer of voltage regulation systems and power converters, American Superconductor benefits from both upfront customer payments as well as continuous royalty payments from its turbines. In May, the company reported its first quarterly profit in its history, reporting net income of $1.3 million, or $0.03 per diluted share, for the fourth quarter of fiscal 2008. The company also reported a backlog of nearly $560 million through March of 2009 and had $117 million in cash on its books. (for more, see What Is An Emerging Market Economy.)

Bottom Line
As one of the more cost-effective forms of alternative energy, wind power is gaining momentum as the worldwide leader. As the demand for energy increases, so will the need for these alternatives. By betting on some of the original equipment manufacturers for wind products, investors can profit no matter who the end users are. The aforementioned stocks are a great way to start that search. (For a more in-depth look, check out our Investopedia Special Feature: Green Investing.)

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