It's getting so you can hardly even walk down to the corner convenience store without seeing one of those huge wind turbine blades being transported to a wind farm. Exaggeration? Only a little.  Wind power is a huge growth industry these days:

  • Wind power now makes up approximately 4% of the nation's electricity generating capacity, as compared to 10% for nuclear power.
  • Nearly all of that generating capacity has been installed since 2000, while no new nuclear capacity has been brought online since 1990.
  • Texas -- traditional home of Big Oil -- hosts 25% of all U.S. wind power generation.

Although wind power has been met with a certain amount of skepticism, the enthusiasm is anything but overblown. Compared to nuclear power projects, wind farms are easier to license, easier to construct, and easier to operate. Their primary drawback is that, well, sometimes the wind does not blow.

Guess who's bringing more good things to life?
As an investor I was most curious to know what manufacturers are profiting from the rapid deployment of wind turbines in the United States. Here I was pleasantly surprised:

Selected 2010 U.S. Wind Power Projects

Company

Capacity Installed in 2010, in Megawatts

% of 2010 Total Capacity

Number of Projects

% of 2010 Projects

General Electric (NYSE: GE)

2543

50.1

35

31.8
Siemens (NYSE: SI)

791

15.6

7

6.4
Gamesa

564

11.1

5

4.5
Mitsubishi Heavy Industries

350

6.9

2

1.8
Suzlon

312

6.1

7

6.4
Vestas

221

4.4

5

4.5

Source: American Wind Energy Association.

By any measure, GE is blowing away the competition. The fact is, GE is winning the lion's share of wind turbine contracts -- 32 projects in 2010, compared to seven for the next largest competitor. Contrast this to the early part of the last decade, when GE had no wind turbine products prior to purchasing Enron's assets in liquidation (and European manufacturers dominated the market).

Wind power investor forecast: headwinds and a chance of squalls
GE is not exactly a pure play in the wind energy space. Revenues from wind turbine sales aren't even broken out separately in quarterly reports. However, finding an American company with a strong wind-power portfolio and steady revenues is a challenge. American Superconductor (Nasdaq: AMSC), which manufactures smart-grid wiring systems, plunged 50% in early April when its largest customer, Chinese turbine company Sinovel, refused acceptance of existing orders. A-Power Energy Generation Systems (Nasdaq: APWR) is also down over 60% in the past year and is completely dependent on projects in China and Southeast Asia. A better investment might be Broadwind Energy (Nasdaq: BWEN), which builds towers for wind turbines. While its stock dropped 70% in 2010 due to a 50% drop in new wind projects nationwide, it appears to have turned a corner and isn't overexposed in Asia.

In analyzing 2010 wind U.S. project data I discovered another American company whose success we should be watching:

Company

Capacity Installed in 2010, in Megawatts

% of 2010 Total Capacity

Number of Projects

% of 2010 Projects

Northern Power Systems

5.9

0.11

32

29.1

Source: American Wind Energy Association.

Northern Power is a privately-held company that specializes in low-power wind turbines. Their main product produces 100 kilowatts (0.1 MW) of power. They are the only company selling turbines that size, which are attractive for factories, city public works, and farm installations. They supplied 29% of all U.S. wind projects -- and 100% of all "small wind" -- in 2010. Based on their success, I would recommend watching very closely this segment of the wind power market for acquisitions and new publicly-held companies. "Small wind" is an easy way for individual companies to lower their energy costs, so I think it's going to be huge.

For now, run with the big dogs
Investors looking for a one-stop wind technology stock with a proven track record will probably need to go offshore at this point. Vestas (Denmark) and Gamesa (Spain) are the largest global suppliers of wind turbines and are totally focused on wind energy. But they aren't winning over the American power industry -- and the table of 2010 projects makes it clear that if you're investing focus is the U.S. market, for now GE is where it's at.

We can help you keep tabs on your companies with My Watchlist, our free, personalized stock tracking service. Click on the links below to get valuable updates on your favorite wind company.