The Manhattan skyline has many landmarks, but no recognizable windmills. That could change, however, as the Department of Energy’s recently released “Annual Energy Outlook” suggests that wind power and windmills may become an increasing part of the American landscape. Are there opportunities for individual investors?

The primary manufacturers of wind turbines sold in America include General Electric, Siemens, Vestas of Denmark, and Mitsubishi. Several smaller American companies, primarily privately held, also manufacture wind turbines.

Wind energy production may offer greater investment opportunities, as most wind energy in America is not generated by large utilities but by small independent producers, such as the privately held FPL Energy and the publicly traded Canadian company Western Wind Energy Corporation.

Though not as glamorous as solar energy or as politically potent as biofuels in the farm states, wind energy still accounts for more electricity generation in America than any other renewable energy source except hydropower. But investors should beware: Wind energy is a small industry and would be smaller without substantial government intervention promoting alternative forms of renewable energy.

Over the past three decades, the financial attractiveness of renewable energy businesses has waxed or waned on the relative costs of fossil fuels and on the specific forms of government programs to promote and subsidize renewable energy.

All forms of renewable energy have benefited from various forms of government intervention, ranging from tax incentives to regulatory mandates such as renewable portfolio standards on electricity utilities. Federal tax credits are set to expire in 2008, and extension of those credits was not included in the recently passed energy bill. Various tax incentives may be included in a farm bill likely to pass Congress. Several states, including New York, have substantial incentives to purchase wind energy systems.

Wind energy still accounts for much less than 1% of electricity generation — and a miniscule share of total energy production — in America. Proponents of wind energy claim that it can be a competitive source of electricity without government subsidies and regulation. But current wind generation and future forecasts rely heavily on government subsidies. Even the Department of Energy forecast of 7% annual wind generation growth does not begin to match projected growth in national electricity demand. To meet most of that increased demand, electric utilities in the coming decades will build more traditional coal-powered steam generation plants. Still, by 2030, the DOE projects wind will generate more than 2.5% of American electricity, more than a five-fold increase over current levels but still well below the current wind shares in some European countries.

Those countries have adopted wind power more readily than America for several reasons, including even greater government subsidies and higher costs for coal-generated electricity. Germany is the largest generator of wind energy, followed by Spain. In both countries, wind accounts for more than 5% of electricity generation. Denmark has the most wind-intensive electricity sector, accounting for as much as 20% of generation. Centuries ago, Don Quixote may have tilted at windmills, but today, thanks to the intervention of the Spanish government, it is the windmills that tilt, or spin, at Spaniards across the countryside. The ubiquitous three-bladed rotors look strikingly like the emblem for Mercedes-Benz.

Will wind become a major source of power in New York City? Such an outcome is unlikely in the foreseeable future. Wind farms are usually in sparsely populated areas, like the large wind farm complex in Lewis County in the Adirondacks, for many reasons. Vast amounts of land, costly in urban areas, are required to generate relatively small amounts of electricity. Wind energy is far more common in the western states. Texas and California are the two leading sources of generation, while New Mexico has the largest share of its electricity generated by wind. Even in rural areas, the noise of windmill rotors, which tower hundreds of feet above ground, and their disruption of local landscapes limit their appeal to many residents.

Anyone listening to the presidential debates would assume that government support for renewable energy will increase. Investments whose return is premised on the whim of government have enormous political risk, perhaps the very attraction of wind energy.