NEW YORK ( TheStreet) -- Has the time finally arrived for wind to blow by solar as an investment theme?

The first quarter 2010 is expected to be a record quarter for the solar sector, and solar companies are ramping up capacity as if all the world were a desert awaiting the arrival of solar panels.

Nevertheless, JPMorgan Chase was out with a report on Tuesday signaling its thematic shift away from solar as the smart renewable energy investment for its clients over the next few years.

JPMorgan initiated coverage of U.S. pure-play wind company Broadwind Energy ( BWEN) with an overweight rating.

At the same time, JPMorgan downgraded shares of a triumvirate of U.S. solar companies -- First Solar ( FSLR); Evergreen Solar ( ESLR); and Energy Conversion Devices ( ENER).

JPMorgan says that institutional investors have tired of solar companies -- a lot of work for uncertain rewards, especially at a time when the critical market of Europe is itself signaling a shift away from hefty support levels for photovoltaic projects.

In the U.S. specifically, there are several reasons supporting wind as a more logical investment play. U.S. utilities are not all located in California, Nevada and Arizona.

Natural gas prices have not spiked to the level at which "smart" investors five years ago predicted the economics of renewable would become clear.

Wind remains much cheaper than solar, and for much of the U.S. utility market, wind remains a more logical choice than solar to drive their renewable energy generation, a point that JPMorgan's renewable energy analyst Christopher Blansett made this week in his research report swapping solar for wind.

Granted, just when the right moment to enter wind as an investment arrives -- if you believe in the wind theme -- is still unclear. The JPMorgan analyst noted that he expects Broadwind shares to bottom in the first quarter of 2010.

In fact, that bottoming may have been taking place on Friday, as Broadwind released a pretty ugly fourth quarter earnings report and shares fell 20%. Broadwind management also guided to a bottoming in the first half of 2010.

The eternal question in investing is whether the damage will get worse before it gets better, or whether investors who wait to long to call a bottom will miss the rally.

The cash grant program that has taken the place of tax equity investors in the past year, is equally available to wind and solar. It's a program that will provide cash grants through 2012 to alternative energy projects that are begun before the end of this year.

JPMorgan thinks that in addition to the prevailing headwinds for solar, the cash grant program has provided the first-ever multi-year period of stable subsidy support in the U.S. for wind.

One fact that has supported solar as the main investment for renewable energy investors is not necessarily a compelling investment reason -- there are simply many more pure-play photovoltaic solar companies that are available as public stocks than any other kind of alternative energy play.

When Deutsche Bank's Climate Group recently started its DB Nasdaq OMX Clean Tech Index, approximately 30 of the 56 companies in the global index were public solar companies. Wind companies were the second-largest group of renewable represented in the index at 13.

In initiating coverage of wind, JPMorgan only has one pure-play wind company in the U.S., Broadwind. The biggest wind company in the U.S., General Electric ( GE) cannot be played as a renewable energy pure-play, and most of the major wind companies globally are still based in Europe.

The sheer number of public companies available to investors in the solar space may indicate that the capital markets have done a good job of taking solar companies public, but does that mean solar companies continue to be the best place for renewable energy investors to bet their assets on the future of alternative energy?

We've actually asked alternative energy investors this question before, pitting wind versus solar previously. Last time we checked in with alternative energy gurus the current was slightly blowing in the direction of wind, while a fair share of investors continued to believe the best bet was splitting money between solar and wind.

Since that time, solar companies shares have taken a licking as successive news reports out of Europe signal that feed-in tariffs are coming down rapidly.

What's more, while the fourth quarter earnings season for solar, which was expected to be a record quarter, has not disappointed in terms of revenue and earnings outperformance, the reaction from solar investors has been, at best, mixed.

So we ask TheStreet readers to take another look at the question.

After all, it's not just us "solar-shorters" asking the question any more, but an institution like JPMorgan representing hedge funds and pension funds: What do you think is the smartest play in the alternative energy sector in the coming three years?

Take our poll below to see the consensus of TheStreet, and feel free to leave a comment to share your views on the future of alternative energy stocks.

What's the strongest approach for investing in alternative energy in the coming three years?

Wind power is the best bet.
Solar power will continue to be the strongest play.
Hedging between wind and solar is the best bet.
Both wind and solar will be eclipsed by the Bloom Box and other disruptive alternative energy plays.

-Reported by Eric Rosenbaum in New York.


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