Alternative energy is a very general term referring to nontraditional sources of electricity. Those traditional sources are out of favor with some political groups because they use exhaustible fuels, they pollute, or both.
Alternative sources of energy are often referred to as renewable or sustainable. A renewable source will replenish itself without effort. Examples include sunlight and wind. A sustainable source has to be actively managed or rationed, but with care, its use can be sustained. Examples include crops and wood.
Ideal alternative energy sources cause little or no pollution. Traditional sources require mining or other environmental disruption to acquire, and create noxious fumes, toxic waste, and other side effects in use. The division is not always clear. Nuclear power, for example, causes little or no traditional pollution, but is typically opposed by environmental factions because of its own unique problem with waste disposal.
In the end, alternative energy is usually "alternative" because it is less economical or less well-developed than traditional sources. Most electricity is, after all, produced by commercial interests or at least by public utilities with some budget limitations. For these decision-makers, nontraditional choices of technology usually require some kind of government mandate or subsidy to be attractive.
Department of Energy figures for 2011 show that about 40% of US electricity on the power grid was generated from coal. (See upper pie chart.) Hydroelectric was the only significant renewable source at 7% of the total. Other renewable sources (broken out in the lower pie chart) collectively supplied 4.5% of the total, with wind being the largest.