All over the world, governments have set aside money for the green energy sector to help get their economies on course, writes Charlie Thomas for FTAdviser. The combined allotment for “green money” in global stimulus packages may be more than $500 billion.

Earmarked funds are being spent on climate change-related investments, such as improvements to railway, grids and water infrastructure.

• The European Recovery Plan involves investments in energy, including offshore wind and carbon capture and storage.
• The American Recovery and Reinvestment Plan will improve renewables, building efficiency, low-carbon vehicles, mass transit, grids and water.
• In December, a climate change meeting in Copenhagen will try and bring more countries, such as China and India, into the environmental accord. Energy efficiency and alternatives will also be addressed. Even if a global agreement on key issues is not met, individual countries will likely continue on with their own projects.

Green technology is becoming popular, but investors should be wary of a possible “green” bubble that could form as a result of hype. (Read how to protect yourself from bubbles). This sector is more of an emerging technologies sector, and investors should note the possible high volatility and risks involved. Find out how to follow trends here.

For more information on green energy, visit our alternative energy category. Among the many ETFs to choose from in this sector include:

• Market Vectors Global Alternative Energy (NYSEArca: GEX): up 7.8% year-to-date

• iShares S&P Global Clean Energy Index Fund (NYSEArca: ICLN): up 7.4% year-to-date

• Claymore/MAC Global Solar Energy (NYSEArca: TAN): up 12.7% year-to-date; FSLR is 10.8%

• iPath Global Carbon ETN (NYSEArca: GRN): down 5.1% year-to-date

• PowerShares Global Wind Energy (PWND): up 38.8% year-to-date

Max Chen contributed to this article.

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.

And it’s not just here. The efforts span across borders, in developing nations such as China. R.M. Schneiderman for The NewYork Times reports that the jobs involved in cleantech, such as solar panel production and manufacturing, are local jobs that create work within the community. Keith Johnson for The Wall Street Journal reports that the Chinese government will boost subsidies for solar power in a bid to juice the development of about 500 megawatts of solar energy in the next two or three years.

The Chinese focus on renewable energy has focused on wind power, but the push has turned toward solar power. The digression of solar power development is dependent upon government support, so subsidy plans are in the making. As a result, solar ETFs are moving higher today.

On our own turf, alternative energy sources come from sunlight, wind, rain, tides and geothermal energy and produce energy. The U.S. government is strongly supporting the use of renewable energy through legislation and is hoping to eventually commercialize these power sources as mainstream energy for the public’s use, reports Ron DeLegge for ETF Guide.

Thus far, the main roadblocks to the plans are falling natural gas prices and empty credit markets, as the start-up and smaller companies need capital to move forward. The less expensive fossil fuels and oil becomes, the less interest there is in alternative energy power sources.

However, the job creation aspect of renewable power sources is great, but is it enough to support cleantech efforts? Although many of the tasks involved in production can be done by machine, the human labor is actually less expensive.

Just a few of the growing number of ETFs that focus on various aspects of renewable energy:

• PowerShares Wilderhill Clean Energy Portfolio Fund (PBW): up 14.5% year-to-date

• Claymore/MAC Global Solar Energy (TAN): up 4.2% year-to-date

• First Trust ISE Global Wind Energy (FAN): up 18.8% year-to-date

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

The American Wind Energy Association (AWEA) recently issued a “B” rating for the United States’ progress toward making 20% of the country’s electricity supply from wind energy by 2030, according to Power Engineering. However, the country received a “C-” for electricity transmission. Other areas graded include an “A-” for technology, “B+” for manufacturing and “B” for siting.

The AWEA expects wind farm development to slow down this year and cited some policy moves that would beneficial to this sector, which include a renewable electricity standard and energy legislation that cover transmission.

In Texas, Billionaire investor T. Boone Pickens says he will be delaying a $10 billion “Pampa” wind energy project till 2013 when Texas completes a $4.9 billion transmission line, as stated in Houston Chronicle. Once the grid is improved, wind and solar power may replace electricity generated from gas and coal.

Picken’s Mesa Power LLP previously ordered 667 wind turbines, which produce up to 1,000 megawatts, and starting in the first quarter of 2011, the turbines may be either installed or thrown out.

Fortunately, both available wind ETFs have a global allocation – the United States is not the top country weighting in either.

• First Trust Global Wind Energy (FAN): up 10.8% year-to-date; Spain is 26.3%; United States is 17%; Germany is 14.3%

• PowerShares Global Wind Energy (PWND): up 21.4% year-to-date; Spain is 23%; France is 14.7%; Denmark is 12.4%

For more information on wind energy, visit our wind category.

Max Chen contributed to this article.

One such form of renewable energy gaining some additional attention is wind energy.  One reason it is drawing the attention is that it is the largest highly concentrated form of renewable energy on Earth and has the potential to power all civilization.  A second reason is the efficiency of this form of energy.  It requires a relatively little area per person to generate energy, states Katie Howell for The New York Times.

Unfortunately, it isn’t all sunshine and smiles on the wind energy platform.  Some obstacles that need to be overcome include the reliability of wind power. Jet streams are more reliable than winds on the ground, but they don’t provide as reliable an energy source as coal-fired power plants. There are a handful of start-ups working to harness those high-altitude winds, though.

Regardless, most scientists remain fairly optimistic of the future of wind energy and predict that eventually, the technologies will be there within a decade.

Some ETFs to take a look at are the following:

• PowerShares Global Wind Energy Portfolio (PWND): up 25.1% year-to-date

• First Trust ISE Global Wind Energy (FAN): up 14.1% year-to-date

For more stories on green ETFs, check out our green ETF category.

Kevin Grewal contributed to this article.

Around $250 billion was spent for new power capacity in 2008 and for the first time, the majority of the money went toward clean energy, a report by the United Nations Environment Program has found. According to James Katner for The New York Times, renewable sources accounted for 56% of investment dollars globally, worth $140 billion, while investment in fossil fuel technologies was $110 billion.

Much of the fossil fuel spending centered on new coal plants in China. Large hydropower projects, wind, solar and geothermal were covered by the report. Power plants generally have along life span, so it will be some time until renewable energy dominates the power grid. Right now, renewable energy accounts for about 6.2% of the total power sector capacity in 2008, which means there’s a lot of room left for growth.

The largest stimulus to green energy could be an agreement among nations at a meeting in Copenhagen in Denmark in December, aimed at creating a successor treaty to the Kyoto Protocol.

• PowerShares WilderHill Clean Energy (PBW): up 19.3% year-to-date

• PowerShares Global Clean Energy (PBD): up 21.6% year-to-date

• iShares S&P Global Clean Energy Index (ICLN): up 11.6% year-to-date

Among the top-performing ETFs for the month include:

• DJ Wilshire REIT (RWR), up 32.4%
• iShares Dow Jones U.S. Home Construction (ITB), up 27.5%
• iShares MSCI Taiwan (EWT), up 26.6%
• Market Vectors Coal (KOL), up 28.9%
• First Trust Global Wind Energy (FAN), up 22%
• SPDR S&P Metals & Mining (XME), up 26.9%

The weakest ETFs for the month include:

• United States Natural Gas (UNG), down 13.8%
• Market Vectors Gold Miners (GDX), down 10.8%

Texas appears the be the leader when it comes to wind power, however, Iowa is blowing out the competition past California, generating the most wind energy. According to Dirk Lammers for Associated Press, The Lone Star state’s 7,118 megawatts dwarfs Iowa’s 2,791 megawatts and California’s 2,517 megawatts, but wind power has grown into a key part of the energy infrastructure in Minnesota and Iowa.

Each state generates more than 7% of energy from wind turbines, and many of them are trying to lure energy companies and create a job market to support the alternative energy industry within their borders. Jobs in this industry have jumped 70% to 85,000 since 2008, but there is much more work needed so ensure that this progress does not go by the wayside.

Meanwhile, shares within this industry took a beating in this market, as companies devoted solely to clean energy fell to about $100 million from $2.1 billion, according to New Energy Finance, an industry-research firm.

Green energy investing is an area that’s growing rapidly, though. David Hoffman for Investment News notes that investment offerings seen as environmentally friendly saw their assets grow 640% from 2001 until last year.

• PowerShares Global Wind Energy (PWND): down 0.5% year-to-date

• First Trust Global Wind Energy (FAN): down 3.1% year-to-date

Most alternative energy-focused ETFs are down 50% or more, as the switch to alternative energy has taken a backseat thanks to falling crude oil prices. As oil prices topped $147 a barrel last summer and gas closed in on $5 a gallon, alternative energy saw renewed interest from consumers. Unfortunately, now the sector has a taken a back seat since fuel prices are no longer sky-high.

The Obama administration has made it clear that it aims to reduce our dependence on foreign oil, so once the government takes action on the $15 billion earmark for alternative energy as outlined in the stimulus package, these investments will be the focus, reports Harry Dumash’s Winning Investing.

• PowerShares WilderHill Clean Energy (PBW): This is best for an all-around approach to the altenrative energy sector, and tracks 51 small-mid size companies involved in the business.

• Market Vectors Solar Industry (KWT): Solar stocks may have the best chance to gain, as advancements within the solar industry are the most rapid.

• First Trust ISE Global Wind Energy Fund (FAN): Wind-powered generating equipment is still in its infancy, but this energy srouce has potential and the power to help energy needs.

Many oil companies are reducing budgets, closing wells and throwing out long-term contracts, report Christopher Palmeri and Stanely Reed for BusinessWeek. About 40% of rig drills for oil and natural gas in the United States have been shut down in order to reduce costs. One company is doing so well that it’s actually expanding.

It is calculated that onshore production could drop by 700,000 barrels per day, or 1% of worldwide supply, due to cutbacks already done.

Devon Energy (DVN), a large oil and gas producer, is set to slash its overall capital budget by almost 60% this year, a severe drop from $8.5 billion in 2008 to $3.5 billion.

As a sign of the times, new technologies are being implemented, such as unmanned production platforms that cost one-third of larger ones, onboard devices that are run by solar energy and some companies are providing ordinary upkeep work such as plugging leaks and tuning furnaces. Companies that adapt in the downturn with improved energy efficiency, new technologies and employing wind and solar power may be the ones elated in the long run.

• Oil Services HOLDRs (OIH): down 17.5% in the last month; down 0.6% in the last three months

• iShares Dow Jones US Oil & Gas Ex Index (IEO): down 23% in the last month; down 6.6% in the last three months; DVN is 7.8%