By Eric Dutram of ETFdb

Solar and wind power are becoming increasingly popular sources of energy, but for obvious reasons these sources aren't able to produce consistently -- solar power generation is impossible at night and wind farms don't do much on a calm day. Companies are now scrambling to find a way to harness these alternative methods and use their power as needed instead of as produced. And until this issue is resolved, alternative fuels are unlikely to truly catch on and surpass fossil-based counterparts.

As this issue becomes a bigger bottleneck for the industry, investment and production of energy storage systems are expected to rise dramatically over the coming years. According to a recent report from Pike Research, worldwide installed system revenues will grow at a strong pace this decade, increasing from $1.5 billion in 2010 to $35.3 billion annually by 2020.

With the tremendous potential for energy storage applications, it appears as if it is just a matter of time until this sector explodes. Should the industry take off as some are expecting it to, some ETFs focusing on critical components of this sector could get a major boost. Here, we profile three funds that seem poised to benefit from this coming boom.

First Trust NASDAQ Clean Edge Smart Grid Infrastructure Index Fund (GRID)

One beneficiary of this likely push to greater energy storage utilization could be GRID, which tracks the Nasdaq OMX Clean Edge Smart Grid Infrastructure Index. The index is designed to track the performance of common stocks in the grid and electric energy infrastructure sector. The index includes companies that are primarily engaged and involved in electric grid, electric meters and devices, networks, energy storage and management, and enabling software used by the smart grid infrastructure sector.

GRID holds 32 securities in total with heavy weightings in the industrial materials, hardware, and business services sectors, which make up close to 80% of the fund's total assets. The fund is also relatively well spread out over market cap levels with no one segment comprising more than one-third of the fund's total assets; mid-caps take the top spot and are closely followed by small-cap companies.

Global X Lithium ETF (LIT)

One candidate to store renewable power is lithium ion batteries which already see wide adoption in a variety of consumer products and have proven their viability from a commercial standpoint.

The fund splits its assets down the middle in terms of allocations toward mining/exploration and lithium battery production suggesting that the fund is likely to benefit from increased demand for lithium as well as greater demand for lithium ion batteries. The fund holds 20 securities in total and has a global perspective; 49% of its assets go to U.S. firms with large chunks also finding their way into companies based in Chile (20%) and Japan (10%).

First Trust NASDAQ Clean Edge Green Energy Index Fund (QCLN)

Although not a pure play, QCLN can offer investors the chance to invest in emerging clean technologies as well as biofuels and solar photovoltaic companies. QCLN invests in 53 companies in total including an 8.6% weighting to Linear Technologies ( LLTC)and an 8.5% allocation to First Solar ( FSLR).

The fund has a more U.S. focus than the others on this list with 87.8% going toward American companies with a heavy weighting on small and mid-cap securities. QCLN has had a rough year thus far in 2010 sinking by 11.5%. However, in the past three months the fund has surged by 9.8% suggesting that better days may be ahead for the clean energy sector.

Disclosure: Eric Dutram is long LIT.

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