Coal is dead. At least that seems to be the opinion of many. Personally, I'm not ready to write coal's epitaph just yet, but, if nothing else, it's safe to say that the coal industry is not at full health these days. While 2012 saw a record 126 million tons of U.S. coal exported, the Energy Information Administration forecast for 2013 calls for about only 115 million tons. However, the ability to mine and ship coal isn't really the issue for coal companies. Much bigger issues lie in a softening demand from Europe and China, as well as proposed new EPA regulations regarding carbon dioxide emissions for new power plants in the U.S. 

Maybe the decline in demand for coal will be temporary, but even if that is the case, the next several years will be rough for coal producers. So where else should you invest during coal's slump?

Coal

All natural
An obvious place to start is coal's biggest competitor, natural gas. For a while now, I've been a fan of the natural gas compression company, Exterran Holdings (NYSE:EXTN), which provides operations, maintenance, service, and equipment for both oil and natural gas production. Exterran's stock has had a steady climb the last couple of years -- it's up over 40% this year alone. The majority of analysts are calling Exterran a hold, but several rate it a buy or even a strong buy. Currently, Exterran is trading in the upper $20 range, and with a price target of $33, it still seems to have some upside. And for those interested in investing in master limited partnerships, Exterran operates an MLP as well, Exterran Partners (NASDAQ:APLP), which has seen a 33% gain in its price this year.

Shale play
Until recently, words like "fracking" and "shale" weren't a part of most people's vocabularies, but both words have become ubiquitous now. While Halliburton first used the process known as hydraulic fracturing in 1947, the process has become more popular -- and more controversial -- in recent years. Chesapeake Energy (NYSE:CHK) is one of the biggest names in shale gas exploration, holding interests in some of the largest shale fields in the U.S. With net operating cash flow of $2.8 billion, shares of Chesapeake have been up over 30% this year, and it offers a dividend with a 1.23% yearly yield. While a majority of analysts rate Chesapeake as a hold, a large number call it a strong buy.   

Going green
Over the past few years, the phrase "green energy" has also been added to our vocabularies. Solar energy has been at the forefront of the green energy push, but many have wondered if it's merely a bubble. While that's possible, a recent report by GTM Research and the Solar Energy Industries Association shows a large increase in the installation of solar panels in the U.S. The positive news seems to be good for solar product manufactures like SunPower (NASDAQ:SPWR), who's seen a whopping 670% rise in its share price over the last year. While a few analysts rate SunPower's stock as an underperform, the vast majority rate it as a hold or a strong buy. Even with a gross margin of less than 10%, SunPower managed to end its fiscal year with net operating cash flow of $28.9 million. While that's not a huge number, the prior year's net operating cash flow was in the red by $125 million.

Bottom line
With earnings season upon us, I'll be watching all of these companies closely. Both Exterran Holdings and Exterran Partners should release third quarter earnings some time next month. Chesapeake Energy will announce its third quarter earnings on Nov. 6, and SunPower will release its third quarter earnings on Oct. 30.

Overall, it seems that natural gas could provide a good hedge against falling coal demand, and an investment in shale drillers might as well, as long as you don't mind the controversy and the litigation that will inevitably be a constant for the industry. Solar is a less proven industry, but the demand seems to be there and as prices for things like solar panels drop, consumers and businesses will be more willing to adopt solar technologies. With or without coal stocks in your portfolio, Exterran, Chesapeake, and SunPower might deserve your attention.

Ryan Lowery owns shares of Exterran Holdings. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.