"Alternatives may not be an important source of electricity, but they are the fastest-growing subsector in the energy space," says energy sector expert Elliott Gue in Personal Finance. Here, he looks at wind power.

"The US Energy Information Administration (EIA) projects that wind power will grow by more than 7%, encouraged by generous government subsidies. Compare that to just 1.5% annualized projected growth in total electricity demand.

"The world's largest wind turbine producer, Vestas Wind Systems (OTC: VWSYF), fell on hard times back in 2005. It priced some of its turbines too aggressively and saw a surge in warranty claims because of defective components.

"But the stock appears back on track. Warranty provisions are down to 5% of revenues. Profit margins surged 4 percentage points year-over-year because of more rational turbine pricing. Vestas' current backlog stands at EUR4.1 billion (US $6.03 billion), up more than 30% year-over-year.

"Spain's Gamesa (OTC: GCTAF) is second only to Vestas in the wind-turbine market. The company recently opened new factories in China and the US, expanding its manufacturing capacity to 3,000 megawatts annually, up 36% from the end of 2006.

"The firm also designs and constructs entire wind farm projects on a turnkey basis. It also offers ongoing maintenance and operation service contracts. Buy Gamesa under US $45.

"Carbon fiber is a strong yet light material used to manufacture turbine blades. Fiber is in short supply amid surging demand in two key markets: advanced aerospace and wind power. Tight supplies mean rising prices for the key manufacturers of fiber, including Advantage Portfolio recommendation Hexcel Corp. (NYSE: HXL) and Zoltek Industries (NSDQ: ZOLT)."