Alternative energy refers to energy that does not come from fossil fuels (oil, coal, natural gas) but rather from renewable sources such as the sun and the wind.

Fossil fuels come from plant matter that existed in the Carboniferous Period, roughly 300 million years ago. They are non-renewable, meaning that on a timescale of human existence, they can be fully used up. Predictions differ on exactly when the world will run out of these resources, but many believe that the end of easily accessible oil, is looming in the next 50 years. For this reason, alternative sources of energy are becoming increasingly necessary, particularly those that cannot be used up like fossil fuels.

Types of renewable energy include solar, wind, water, biomass, geothermal, hydrogen, and nuclear. Each of these has its own pros and cons. Nuclear energy, for instance, is efficient and capable, in theory, of providing much of the world's energy needs; but it is extremely expensive to build a nuclear power plant, and there are significant safety concerns about both the plant and the resulting radioactive waste products. Solar power is safe, clean, and widely available, but is technologically limited, at least for the moment, by its relative inefficiency. Wind power is also safe and clean, but can only be collected in areas with a constant light wind. Hydro-electric power-one of several forms of water power--is safe and efficient, but can be environmentally destructive (building dams destroys ecosystems); additionally, with fresh water sources diminishing in many places, some question whether hydro power is truly a renewable resource. (Other forms of water power include harnessing energy from waves and tides.)

Context

Renewable energy is certainly nothing new. Throughout history, people have harnessed the power of the sun-particularly in the design of buildings, using what today we call passive solar technology, which really just means orienting buildings to make use of light and heat from the sun. In fact, only since people began relying so extensively on fossil fuels did architecture shy away from commonsense passive solar design.

Water has been used for centuries, mainly to turn wheels for milling lumber or grain. The first hydro-electric dam in the U.S. was built in 1880. Wind power has also been harnessed for centuries, though the technology has improved substantially since the Dutch built their ubiquitous wooden windmills. And biofuels, which today are derived from a wide variety of sources including wood, animal fat, soy, switchgrass, and many others, were the main staple of energy use-mainly in the form of wood-throughout human history.

Investment is key to developing sound renewable energy options for the future. Many advocates of alternative energy have pointed out that the level of government subsidies provided to the fossil fuel industry ensures that the price of alternative fuels is kept relatively high, making them economically unattractive options on a broad scale.

Many state and local governments are moving forward on alternative energy projects in order to spur investment and innovation and bring prices down. In Colorado, for instance, Amendment 37 requires certain percentages of energy to come from renewable sources. In many areas, energy consumers can opt to purchase wind power for a premium each month. While this does not mean that that customer's energy needs will be supplied by wind, it does ensure that some electricity is being generated by wind turbines.

Elsewhere on the web:

The National Renewable Energy Laboratory

Renewable Energy Access

The Source for Renewable Energy

Renewable Energy History

Sustainable Solar Products 

Further Reading:

The Homeowner's Guide to Renewable Energy: Achieving Energy Independence Through Solar, Wind, Biomass and Hydropower by Dan Chiras

Renewable Energy in Nontechnical Language by Ann Chambers

The End of Oil: On the Edge of a Perilous New World by Paul Roberts