This is the first part of a two-part* interview with JPMorgan Chase alternative energy analyst Christopher Blansett. This week Blansett produced a report advising institutional investors to shy away from solar stocks and embrace wind energy stocks in the next two years. We sat down with Blansett to shed some light on JPMorgan's total eclipse of the sun.

>>*Click here for: Why Wind Is a Better Buy Than Solar (Part 2)

NEW YORK ( TheStreet) -- The latest pessimistic outlook for solar investors was provided on Tuesday by JPMorgan Chase analyst Christopher Blansett. But Blansett went took his pessimistic outlook much further than most.

The JPMorgan analyst began his negative turn on solar by downgrading three of the U.S. solar stocks that he covers -- First Solar ( FSLR), Evergreen Solar ( ESLR) and Energy Conversion Devices ( ENER). More notably, however, Blansett recommended to JPMorgan clients -- from hedge funds to pension funds -- that they forsake solar and focus their renewable-energy investing on the growth of the U.S. wind industry, at least for the next two years.

Blansett is far from alone in this position. Several solar analysts have noted in recent weeks that institutional investors seem to have tired of solar and have been looking for alternatives in the renewable sector to maintain their exposure. Blansett says that most institutional investors have decided that solar is a lot of work for little reward. Over time, as there are more wind-focused pure-play companies, institutional investors will look more toward wind and move away from early solar-centric investing.

JPMorgan initiated coverage of the U.S. wind sector on Tuesday, with an overweight rating for Broadwind Energy ( BWEN). The analyst's bullish call on wind sent shares of Broadwind up by more than 6% on the day.

Solar companies have, of course, been using this earnings season as a pulpit to play up the first-half demand from Germany, and argue for the second half pull-in from other major markets including the U.S., China and Italy. What's more, some of the capacity expansion plans -- reaching as high as 1 GW to 1.25 GW per solar company -- have sparked fears of a seriously oversupplied sector. The JP Morgan analyst shares these fears, estimating that the solar oversupply in the second half of 2010 could run as high as 3 gigawatts to 4 gigawatts on an annualized basis.

TheStreet spoke with Blansett on Tuesday about his sour solar sentiment and his newfound preference for wind.

TheStreet: What's your basic thematic argument in favor of wind, relative to your solar outlook?

Blansett: It is clear that Europe, which has been driving demand for solar, is basically saying subsidies will be coming down in all the countries -- at different times and at various levels of reductions, but the theme is clear from Europe.

To be completely honest, we never overly warmed up to the solar stocks, but we've never been so overtly negative either. Our research approach is to view sectors on a relative basis, and the fact is that there have been less pure-play alternative energy companies available to investors outside the solar sector.

Wind is a very large sector, yet it hardly gets news flow due to the lack of pure-play wind companies, and with General Electric ( GE) being the biggest player.

Yet when you talk to utilities, they look at wind as being the primary driver of their renewable energy generation. Solar is great in California, but what does a utility in Illinois do?

Our negative view of the solar outlook in Europe being based on subsidies cannot be separated from how we look at the wind industry, where we see a stable subsidy environment in the next two years. That's a long time for investors, and the three-year time horizon make the underlying fundamentals for wind more attractive than for solar.

TheStreet: So it's overweight wind and underweight solar?

Blansett: Wind industry fundamentals will rebound from a bottom in the first quarter Editor's Note: Since January, shares of Broadwind Energy lost $3 in value. Since July 2009, when Broadwind shares were at a 52-week high of $12.49, shares are down approximately $6.50.

It is an early cyclical play to participate in wind at this point with utilization rates at factories still relatively low. Broadwind is at an approximate 35% utilization rate -- and that should improve in the second half of the year -- whereas solar pricing comes under significant pressure and capacity concerns become a limiting factor for the solar stocks.

Let's put investing in the proper perspective though. We are talking about wind versus solar over an investable future of 12 to 24 months.

TheStreet: Why is the time frame for wind energy investing only a few years, when the role of renewable should extend over decades?

Blansett: One reason is the short-term subsidy opportunity in the U.S. for both wind and solar. There is a cash grant program available to all alternative energy projects that are started before the end of 2010 that will broadly benefit both wind and solar. However, wind does not face any of the headwinds that solar faces globally as European subsidies are reduced. Approximately 90% of all wind projects in the next three years, as long as they are started before the end of 2010, will be using the cash grant.

Overall, the history of the wind industry has been one of fairly inconsistent subsidies, but this opportunity with the cash grants represents the first time in a historical context that we have a multi-year horizon for wind energy investment. It started with 2009 and extends through 2012, as long as the projects are begun by the end of this year.

Even if the cash grant is not extended at the end of this year, which could happen, we know that projects begun before year-end will qualify for the cash grant through 2012.

Putting that in the larger context of cheap energy production, wind energy is so much cheaper than solar, and a utility can buy wind power in most U.S. regions for 5 cents a kilowatt hour.

We are estimating that there could be as much as 84 gigawatts(GW) of total wind capacity in the U.S. by 2012. This growth for the wind sector is based on the 34 GW that we estimate was in the ground already at the end of 2009, and 50 GW of growth.

>>Click here for: Why Wind Is a Better Buy Than Solar (Part 2)

-- Reported by Eric Rosenbaum in New York.

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