By 24/7 Wall Street: Alternative energy is big business -- and getting bigger. The industry includes hundreds of companies that make a piece of the continuously expanding jigsaw puzzle that is the alt energy space.
Rather than trying to pick winners and losers -- which at this point is probably impossible -- we've tried instead to identify the 25 companies we think will shape the alt energy industry for the next three to five years.
To make this determination, we've looked at a number of characteristics we think will play an important role in shaping the industry's future. First, we chose companies we think are market leaders based on their market capitalization, revenues, and technology leadership.
Second, we tried to assess the longer-term opportunities a company has based on its current influence, the strength of its competitors, how much influence government policy will have on its success, and how likely it is and how quickly the company's products can be implemented at a reasonable scale.
Third, we tried to assess a company's access to capital. Some of the questions we asked were: Is it publicly traded or privately held, how strong is its balance sheet, and, perhaps most important, how much support can it expect from government?
Fourth, we looked at a company's customers, their size, and their influence in their own industries. Finally, we tried to assess how high the barriers are to competitors entering the same sector. Likewise, how well can a company fight off competition that's already in the sector?
Not every company has a top rating in each category, but the ones we've picked have a good many of them.
In addition to looking at the companies, we've also identified a few issues that are going to provide the context for alt energy companies in the years ahead. Perhaps the most important of these, from a commercial standpoint, is what policies China and the US will adopt. China plans to spend aggressively on its own domestic alt energy initiatives, and it is pouring enormous amounts of money into the coffers of several of the country's manufacturers.
Other areas that bear watching are consumer acceptance for electric vehicles and plans for infrastructure investments in the electricity grid and in smart-grid technology.
Check out a sampling of the top alternative energy companies and visit 24/7 Wall Street for more information.)