Energy costs are on the rise, and some forms of energy are eventually going to be gone forever. This could be a boon to alternative energy exchange traded funds (ETFs), especially if the United States plays its cards right.

Why hasn’t renewable or sustainable energy been utilized in the United States as a mainstream source of power yet? Italy, Germany and Sweden and China are miles ahead of the U.S. in their quest for sustainable energy. Michelle Melio for The Examiner reports that the United States invented much of the modern solar technology, while the rest of the world (even developing countries) is creating much more power from it than we are.

However, there are a number of factors that favor the growth of solar and wind energy both in the United States and overseas, including:

• DuPont has invested $120 million in solar energy; they also anticipate that the photovoltaic market will grow rapidly over the next several years
• Solar panels are getting cheaper (however, sales have slowed because of tight credit markets)
• The energy and Treasury departments said they’d give $2.3 billion in tax credits to clean energy equipment makers, says Keith Bradsher for The New York Times
• Wind energy now supplies 2% of U.S. power and grew 60% in 2008, making the United States the world leader, according to a U.S. Department of Energy report
• Wind projects accounted for 42% of new electric capacity in 2008

There’s a growing number of alternative energy ETFs available. Among them:

• Claymore Global Solar Energy ETF (TAN): up 0.91% year-to-date

• First Trust ISE Global Wind Energy Index (FAN): up 24.7% year-to-date

• PowerShares NASDAQ OMX Clean Edge Global Wind Energy (PWND): up 36.8% year-to-date

For more stories about alternative energy, visit our alternative energy category.

Tags: Alternative Energy, FAN, PWND, Sector ETFs, Socially Responsible ETFs, Solar, TAN, Wind