According to the country’s deputy director of renewable energy, that investment will increase the country’s wind-power capacity to 30,000 megawatts from the current 12,000 megawatts. Further, China expects its investment in alternative and renewable energy sources to exceed 2 trillion yuan by 2020.

With that level of investment, China would easily surpass Europe, Japan and the US as the world’s largest consumer of renewable energy by 2010. China’s energy consumption has already more than trebled in just over three decades, largely powered by traditional fossil fuels. In fact, an abundance of cheap power and low-cost labor have fueled much of the country’s economic growth.

On the flip side of that coin is the United States, where environmental and energy independence concerns are the driving forces behind alternative energy investment. As part of Washington’s stimulus efforts, $93 million in funding has been set aside to promote American wind energy research and development, while geothermal and solar energy projects are slated to receive $467 million. And those are just the hard and fast numbers; the ultimate dollar figures will certainly be much higher.

The United Nations Environment Program reported in 2008 that investment in renewable energy accounted for 56 percent of the $250 billion invested globally in building new power capacity. That’s the first time renewable and alternative energy investment has trumped traditional carbon sources, and that trend is likely to continue.

Here in the US, wind energy accounted for 42 percent of all new energy generation capacity installed last year. The European Union aims to have 20 percent of its energy consumption fueled by renewable sources by 2020 and has been spending billions of dollars towards that goal for almost a decade.

Renewable and alternative energy should be a major investment theme for anyone in the markets. One major roadblock that investors encounter when it comes to actually putting money to work is the fact that many of the best names are based overseas. And although most US-based brokers have made leaps and bounds in improving access to foreign securities, direct international investment can still be more costly than buying US shares.

Paradoxically, the large amount of money being spent by the government also presents a bit of a challenge to investors. Although the industry’s biggest names will likely capture the most cash, each project typically includes multiple contract awards; reaping the full benefits from the government’s stimulus is a challenge.

To that end, funds are the best way to play the theme, and quite a few exchange-traded funds (ETF) serve that purpose.

The first is First Trust Global Wind Energy (NYSE: FAN), which as the name implies, focuses on wind. It has enough daily volume behind it–on average, 100,000 trades–that buying and selling isn’t a huge issue, and its bid/ask spread stays within a reasonable range. Its premium/discount spread also tends to stay within about 1 percent of net asset value, a huge plus.

Its portfolio is attractive, made up of both pure-play wind development companies like Vestas Wind Systems (Denmark: VWS) and Japan Wind Development (Japan: 2766) as well as utilities that are putting wind power to work. FPL Group (NYSE: FPL) and E.ON (Germany: EOAN, OTC: EONGY) are two names that fall into this category.

All together First Global Wind Energy is a great offering with a lot of potential upside. Relative to wind energy, solar power is a slightly more speculative sector within the renewable energy universe. Solar projects tend to be fairly large and more expensive than other forms of renewable energy; thus far solar power hasn’t gained broad acceptance, though technologies are rapidly improving. And with the pace of R&D spending accelerating, I expect solar power to grow in prominence over the coming years.

Market Vectors Solar Energy (NYSE: KWT) is a great way to invest in a pure-play ETF. Again, it has tight bid/ask and premium/discount spreads and is readily tradable.

Nuclear energy is also sure to play a large role in meeting emissions targets and is gaining broader acceptance in the US, even among the environmentalists who used to oppose it tooth and nail. Three Mile Island and Chernobyl are becoming more distant memories for both policymakers and consumers, making it a much more palatable option.

As of now, nuclear power isn’t considered a renewable energy source under US policy, though it has proponents in the US Senate Committee on Energy and Natural Resources. If that change happens, I strongly suspect utilities would make more use of nuclear energy; it’s a proven technology and fairly predictable from a cost perspective. In fact, permits have already been granted for a new reactor in Texas, and several other permits are in the works throughout the US.

Market Vectors Nuclear Energy (NYSE: NLR), like its wind-devoted cousin, is a diversified play on nuclear power. It holds both the manufacturers of the technology and reactor designers and builders, in addition to utilities already utilizing nuclear power.

Finally, investors can gain exposure to all of the various aspects of alternative energy, though it’s a bit light on the nuclear side, via Market Vectors Global Alternative Energy (NYSE: GEX). It also invests in up-and-coming companies that are working to improve current technologies and developing new ones.

Alternative and renewable energy is here to stay regardless of your thinking on the global warming issue; it wouldn’t hurt to power up your portfolio by investing in a growth industry that should generate handsome profits down the line.