The Best Alternative Energy Stocks Out There

“We know the country that harnesses the power of clean, renewable energy will lead the 21st century.” — President Barack Obama, address
to Congress, Feb. 24, 2009

Obama has made no bones about his intention to transform America’s energy infrastructure into a big, green machine. And with an overwhelmingly Democrat
House and a supermajority in the Senate, the country’s energy generation and delivery systems are likely to get greener and greener in the months
and years ahead.

We’ve already seen a big push toward the creation of so-called “green jobs” in the latest vote by the House over cap-and-trade legislation, but
the real sod on the green front can be found in the American Recovery and Reinvestment Act, i.e., the stimulus bill.

Next: Spending a Lot of Green

Spending a Lot of Green

In February, the president signed the American Recovery and Reinvestment Act into law. The bill included more than $70 billion in direct spending
and tax credits for clean energy and transportation programs, including:

• $2 billion in grants for advanced batteries used to power electric vehicles
• $4.5 billion to make federal buildings more energy efficient
• $6 billion in subsidized loans for renewable energy projects
• $6.3 billion in state energy efficiency grants
• $11 billion toward smart grid spending
• $20 billion in tax incentives and credits for renewable energy and plug-in hybrids

Next: The Greening of the Rules

The Greening of the Rules

In addition to the green spending spree, other legislation has been passed recently that’s designed to help spur growth in the alternative energy
sector. This legislation includes an eight-year extension for production and investment tax credits for solar panels, a three-year extension for credits
for wind power projects, and new rules allowing utilities to receive them.

Clearly, the zeitgeist in the Obama administration, Congress and, indeed, throughout most of the country is in favor of alternative solutions to
the nation’s dependence on foreign energy sources. Moreover, most American’s feel it’s a good idea to get our energy from clean sources, provided
that energy is cost efficient.

Next: Be Green, Make Green

Be Green, Make Green

Given the new green milieu in the country, the question for investors now becomes: How can we make money? Or to put it the way ChangeWave Investing founder
Toby Smith once asked me, “How can we make green by being green?” That question led us to write an entire book on the subject, aptly titled Billion
Dollar Green: Profit from the Eco Revolution.

To be sure, conditions in the stock market, the alternative energy space and Washington, D.C., have changed a lot since the book’s publication last
year, but what hasn’t changed is the need for investors to find the best-of-breed alternative energy stocks. And with that in mind, let’s take a look
at five green stocks that just might make your portfolio a whole lot greener.

Next: Suntech Power Holdings — Light Up Your Portfolio

#1 Suntech Power Holdings — Light Up Your Portfolio

China-based Suntech Power Holdings (STP[2]) is one of the largest solar energy companies in
the world based on production output and capacity of solar cells and modules.

STP has developed an advanced process to manufacture photovoltaic (PV) cells cost-effectively at a large production scale with high conversion efficiencies
(i.e., how much sun energy is converted to electrical power). This technology will likely help STP outshine the competition in the solar space, and
that means investors are likely to see their portfolios lit up by the power of STP shares.

Suntech is on of the Top 10 Summer Stocks[3].

Next: Cree — LED All the Way

#2 Cree — LED All the Way

Sometimes referred to as solid-state lighting, LED lighting technology creates light with less heat than incandescent or fluorescent bulbs. Solid-state
lighting uses a semiconducting material to convert electricity directly into light, and LED bulbs are generally three to four times more energy efficient
than incandescent bulbs.

The best company in this space is Cree (CREE[4]), which developers and manufactures the semiconductor
materials used for LED lightning. Cree’s LEDs have the ability to increase energy efficiency and performance. Oh, and if you’ve been in the stock
lately, the shares have also increased your portfolio’s performance.

Next: PowerShares Water ETF — Why Not Use a Bucket?

#3 PowerShares Water ETF — Why Not Use A Bucket?

We’re about to see a renewed emphasis on the rebuilding of our nation’s water infrastructure. Now, there are plenty of companies serving various
niche water infrastructure markets, but rather than trying to pick one, why not use a bucket?

The bucket in this case is exchange-traded fund (ETF) PowerShares Water Resources (PHO[5]),
which gives you exposure to the best companies in the water industry. The fund has a solid balance of holdings, with no single stock representing
more than 5% of the total portfolio. If you want to make some green in your portfolio, then taking the aqua route is a good way to do so.

Learn 5 advantages of trading ETFs.[6]

Next: Itron — Your Meter Just Got Smarter

#4 Itron (ITRI) — Your Meter Just Got Smarter

Smart grids require smart meters, and there is no better smart meter maker than Itron (ITRI[7]).
As the leading provider of smart meters for electricity, gas and water utilities, Itron is uniquely positioned as the go-to smart meter maker across
the energy measurement spectrum.

Itron has a more than 50% market share in the electric smart meter segment in the United States and Canada, and the company could dominate the smart
meter space. With more than 3,000 customers worldwide, and tens of millions of smart meters operating throughout the globe, Itron is definitely a
stock to watch.

Next: Echelon — The Negawatt Solution

#5 Echelon — The Negawatt Solution

Echelon Corp. (ELON[8]) is one company riding what’s known as the green building wave. The
company designs, builds and sells networks that connect machines and other electronic devices for the purpose of sensing, monitoring and controlling
the world around us. You see, before you can save energy, you’ve got to know where and when that energy is used (or wasted), and that means you need
some very smart devices that can provide you with the data necessary to do so.

The future of greener buildings is in what’s called energy consumption or “negawatt” management. The idea behind negawatt management is that a kilowatt
saved is a kilowatt earned. The easiest, fastest, cheapest and, ultimately, cleanest form of energy is the one that never has to be produced in the
first place. But before you can save a negawatt, you first have to identify it.

Next: Profitable Winds of Change

Profitable Winds of Change

In the Bob Dylan classic, “Subterranean Homesick Blues,” the singer famously blurts out the line, “You don’t need a weatherman to know which way
the wind blows.” Those profound lyrics hold especially true for the prevailing winds in the alternative energy space.

The greening of buildings and the power grid, the move toward solar and wind power, the use of LED lighting and the effort to upgrade the nation’s
water infrastructure all add up to some very strong winds just waiting to be harnessed by investors willing to hoist their green sails. A green wind
is blowing — and now you don’t need a weatherman to tell you so.

For more trading ideas, see:

• 6 Bargain Biotech Stocks[9]
• 7 Ways to Hedge Against Inflation[10]
• 6 Tech Stocks to Own Now[11]