The survey - which focused on industry trends and opportunities - was completed August 4, 2008, and a total of 196 respondents working in alternative energy sectors participated.



Solar Is Up

The solar sector (51%; up 2-pts) has come on strong over the past 12 months according to industry respondents - echoing the findings of our December 2007 survey. However, so has Wind Power (49%; up 14-pts).

Going forward, Solar (56%; down 2-pts) is expected to achieve the most rapid growth for the next 12-24 months, but Wind (41%; up 13-pts) is also showing striking strength going forward.

In addition, the rapid rise of gasoline prices this year has led to significant gains in the Hybrid/Electric Vehicles sector.

Conversely, Biomass has fallen in terms of industry sentiment - due in large part to the impact of rising raw materials costs. One-third (33%) of industry respondents pointed to Biomass as the sector most negatively affected by the high cost of raw materials - with more than half (51%) specifically pointing to ethanol production.

As respondent CO206739 writes, "Corn Ethanol producers have cut back their expansion plans because of the high cost of steel for construction, and the high cost of corn for feedstock. The companies that built facilities years ago have the advantage on capital costs, but they are suffering from high feedstock costs and the uncertainties of market conditions."

Customer Demand for Alternative Energy

The survey also focused on customer demand for alternative energy products, and Hybrid/Electric Vehicles (Net Score = +86) are clearly seen as having the biggest demand increase in the next year with Solar (+79) and Wind (+78) products also garnering big jumps in customer interest.

But the most telling findings were when we asked industry respondents to rate the demand for their own company's alternative energy products and services.

Here's what we found:

# Upswing in Sales. Business is booming, according to our Alternative Industry respondents - of which an extraordinary 45% see their company's sales increasing over the next 90 days. In comparison, just 4% see their company's sales decreasing.

# Capital Budgets Adjusting Higher. In another big positive, 38% project their overall capital budgets will increase over the next 90 days, more than triple the percentage who say it will decrease (11%).

# Inflation Spurring Demand. Better than half (56%) say inflationary pressures in the rest of the economy are causing increased demand for their alternative energy products and services. The vast majority (77%) of these respondents cite the rising price of traditional energy sources as the main reason for the demand growth. As FID04725 writes, "Inflation is putting more pressure on energy prices than it is on the raw material costs for alternative energy technologies. Thus, alternative energy is becoming more affordable relative to conventional energy."

Leading Companies

We also asked industry respondents to tell us which alternative energy companies they believe are at the forefront of their respective market sectors. Here's what they told us:

Solar Sector: First Solar (FSLR), SunPower (SPWR) Wind Sector: General Electric (GE), Vestas Hybrid/Electric Sector: Tesla Motors, Energy Conversion Devices (ENER)

The takeaway from this Alternative Industry survey is that Solar continues to burn up the charts and the momentum behind Wind Power is now blowing stronger than ever.

Investors take note -- in the midst of a severe worsening of the U.S. economy the Alternative Energy sector continues to ride high.