This report presents results from a two-phase study of the status of the solar- and wind-energy industries in the Appalachian Region and the challenges firms and state governments face in preparing for and competing in these rapidly emerging, worldwide industries. The study found that states that have experienced rapid growth in solar or wind installations and/or manufacturing have either: 1) introduced a set of mutually reinforcing policies that lower the initial capital outlay for the installations (e.g., feed-in tariffs, rebates, low-interest loans, sales or property tax abatement); 2) had a renewable portfolio standard (usually with a solar or wind set-aside); and/or 3) had energy costs above the national average, which shortened the payback period for investments.