LPTC Leap Technology Inc (CE)

MANAGEMENT’S DISCUSSION OF FINANCIAL PERFORMANCE

FOR THE YEAR 2013

Fund Performance: The Fund’s share price increased 30.52% for the year ending December 31, 2013. The Net Asset Value (“NAV”) began at $36.40 on January 1, 2013 and closed at $46.93 after payment of a $0.58 dividend per share. The Fund’s net assets increased during the year from $149.8 million at the beginning to approximately $175.1 million at the end due primarily to appreciation of the Fund’s holdings.

As of December 31, 2013, 42.8% of our portfolio was invested in European companies (with 32% priced in Euros and the reminder in other currencies). The rest of our holdings included 36.5% in U.S. based firms, plus 6.1% in cash in U.S. banks and credit unions; 4.8% in Asia; and 9.8% in Canada.

Factors Affecting the Fund: Most Fund holdings, along with the broader stock market, experienced gains in their share prices. Renewable energy, particularly wind and solar, have established themselves as an increasingly competitive means of electric power generation, even as political support in Europe has diminished in the challenging European economic environment.

While European governments abandoned their former position as leading advocates for climate issues and clean energy, in the U.S., President Obama has expressed concern about climate change, and there is economic support for clean energy in many states. This picture is tempered by the President’s continuing support for an “all of the above” energy strategy that includes policies that will promote renewable energy at the same time that the U.S. expands its production of natural gas and domestic oil.

New financial models developed in the U.S., including the creation of green bonds, “yield” companies, real estate investment trusts (REITs) specifically for renewable energy projects, and leased rooftop solar arrays, have lowered the cost of financing renewable development. The Fund has taken advantage of these arrangements by investing in NRG Yield, Inc., Pattern Energy Group Inc. and Hannon Armstrong Sustainable Infrastructure Capital, Inc.

Spain, once the world leader in developing wind and solar power, cut or totally eliminated feed-in tariffs supporting electric rates from renewable sources. It also imposed a 7% tax on locally generated solar and wind power. Now the Spanish companies have made use of expertise developed during better times and pursued growth outside their home market, picking up business in the U.S., Africa and Latin America.

The large European renewable energy developers, led by utility subsidiaries, such as EDP Renovaveis SA (Spain/Portugal) and Enel Green Power SPA (Italy), are competitive power producers in Europe even without the previous financial support. At the same time, they have established strong positions in the U.S. and South America.

The European Union countries, with substantial wind and solar assets, have recently softened their commitment to mandated goals for how much electricity and energy would be generated by non-polluting sources — wind, solar, geothermal, hydro, tidal, biomass — by set dates. Rather than previous agreements imposing a required level of alternative energy production of 20% by 2020, a recent EU declaration

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called for member states to voluntarily seek to achieve a 27% level by 2030. Bloomberg New Energy Finance recently reported that renewable energy investment across Europe fell from $97.8 billion in 2012 to $57.8 billion in 2013.

This same report noted that since a global investment high point of $317.9 billion in 2011 for alternative power, by 2013 total investment had fallen to $254 billion.

On a positive note for purchasers of solar modules, some of this reduction is due to the falling cost of solar grade silicon, the alleged Chinese dumping of modules at below cost, solar photovoltaic (PV) systems and increasing size and efficiency of wind turbines.

While government funding and private capital spending for new projects retreated, public markets — stocks and mutual funds — registered solid gains as investors slowly recovered from the rude shock administered by the world financial crisis in 2008.

Overall investment in renewable power fell in China, which had been the most robust market in recent years. Brazil, the market leader in Latin America, reduced its investment more than 50%, from $7.1 billion in 2012 to $3.4 billion in 2013. At the same time, Chile, Mexico and Uruguay substantially increased their levels of private and public funding for new projects.

In the United States, renewable energy investment dollars fell from $53 billion in 2012 to $48.4 billion in 2013. At the same time, the total number of new solar installations, both utility scale and small commercial and residential roof-top PV, grew. This unusual development is due partly to the lower cost of PV solar modules as we mentioned above, along with increasing energy efficiencies in transportation, building systems and electric transmission.

According to the U.S. Energy Information Agency (EIA), until recently, the country had continued to move away from coal as the primary fuel for electric power, Natural gas, selling at historically low prices, was the replacement fuel for the most part. From 2011 to 2012, coal use fell by 12.7% but still accounted for 37% of the nation’s electric power generation. Natural gas usage grew by 20.9% in that same period to comprise 30% of the fuel supplying electricity. The relative difference in green house gas emissions (coal emits 205.7 pounds of carbon dioxide per million BTUs; natural gas emits 117 pounds per million BTUs) contributed to the overall reduction in CO2 levels in recent years. However, the most recent EIA report notes that a sudden spike in gas prices coupled with the severe weather has reversed this situation, at least for the short term. In 2013, coal climbed back to 39% of the fuel mix for electricity and natural gas retreated to 27.5%.

During the period from 2011-2012, nuclear power declined slightly but still provided 19% of U.S. electricity. Traditional hydro power was 7%. All other renewable (wind, solar, geothermal, biomass, etc.), despite their recent growth, amounted to only 5% of our total capacity.

The Fund looked to renewable energy producers with a stable base of regulated income producing generation facilities, companies with a good record of project development and a healthy pipeline of new projects, and mature companies with solid earnings whose share prices had declined below reasonable levels and seemed due for a resurgence.

Portfolio Holdings and Changes:

New Investments in 2013: We have discussed some of these companies in earlier reports, but here’s a brief review:

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Brookfield Renewable Energy Partners LP (Canada/Bermuda), is one of the largest public pure-play renewable power businesses in the world, with 6,000 megawatts (MW) of mostly hydro and wind installed capacity in the U.S., Canada and Brazil.

Enel Green Power SPA (Italy), a subsidiary of the Enel Group, is dedicated to international development and management of power generation from renewable sources. They currently own 700 plants in 16 countries in Europe and the Americas with 8,000 MW of capacity. Renewable sources include wind, solar, hydro, geothermal and biomass.

Hannon Armstrong Sustainable Infrastructure Capital, Inc. is a REIT which makes debt and equity investments in sustainable infrastructure projects that increase energy efficiency, provide cleaner energy, positively impact the environment or make more efficient use of natural resources.

NRG Yield, Inc. is a subsidiary of NRG Energy (an S&P 500 ^® company and owner of Green Mountain Power, a leading solar PV producer). NRG Yield owns a diversified portfolio of contracted renewable and conventional generation and thermal infrastructure assets in the United States, including eight utility scale solar and wind generation facilities and two portfolios of distributed solar facilities that collectively represent 1,324 MW. The thermal infrastructure assets provide steam, hot water and/or chilled water.

Panasonic Corp.(Japan) SPADR is an international consumer electronics company whose businesses include manufacturing solar PV modules, and that has become the largest supplier of lithium ion batteries to manufacturers of electric cars (including Tesla motors).

Pattern Energy Group, Inc. is an independent power company focused on ownership and operation of 1,255 MW wind power projects in the U.S., Canada and Chile.

Holdings Sold:

We sold our position of A.O. Smith Corp., a manufacturer of energy efficient hot water heaters, when the share price climbed to a high valuation point and we felt we should lock in our gain.

We sold Atmos Energy Corp., a natural gas distributor, on account of a preference for other natural gas distribution companies with greater involvement in renewable energy generation and energy saving combined heat and power facilities.

Finally, we sold SMA Solar Technology AG (Germany) because of the potential impact of the retreat of Germany’s government from policies supporting solar PV development. SMA Solar Technology is an international manufacturer of inverters for PV solar, but its largest business is in Germany.

Other Changes and Adjustments in the Fund: .

Wind: Our strongest performers in 2013 were our two wind turbine manufacturers: Vestas Wind Systems AS (Denmark, up 402.8%) and Gamesa Corporacion Tecnologica SA (Spain, up 356.6%). Both had seen their share prices plummet for several years as companies and governments pulled back from ambitious renewable energy projects in the wake of the 2008 financial crisis. Gamesa was further battered by the Spanish government’s retreat on renewable energy support. During the past several years, Gamesa focused its efforts on international expansion and is now active in 44 countries around the world, with contracts for project development and long term maintenance of wind facilities. Vestas also went through a major restructuring which included closing a number of manufacturing plants,

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reorganizing their debt and replacing their chief executive. Both companies returned to profitability in 2013 and have built up a reasonably healthy roster of project commitments going forward.

As their share prices climbed during the year, we sold some of our stock in both firms to avoid their becoming overweight in the portfolio.

Energy Efficiency and Conservation: This continued to be a strong area of development in 2013. This year brought broad advances in technology, including significant capacity improvements in storage batteries for electric cars and energy systems, improved efficiencies in lighting with LED costs dropping rapidly, upgrades and improvements in transmission systems and a greater emphasis on energy conservation in building construction and renovation.

Our companies in this sector were also among our best performers. Johnson Controls, Inc. (building systems for energy management, hybrid car batteries and stationery energy storage systems), up 67.3%; WFI Industries Ltd. (Canada; residential and small commercial geothermal and heat exchange systems), up 66.1%; FuelCell Energy, Inc. (molten carbonate and solid oxide fuel cells for power generation) up 53.3%; Koninklijke Philips Electronics NV (Netherlands; LED and energy efficient lighting and appliances) up 39.3%; ITC Holdings Corp. (electric transmission project construction) up 24.6%; and Schneider Electric SA (France; energy management systems for buildings and industrial facilities) up 15.6%.

Solar PV: Finally, after several disastrous years for solar PV manufacturers, we added SunPower Corp. (PV module manufacturer and project developer for residential, commercial and utility-scale systems) back into the Fund’s holdings, along with Panasonic and our long term position in Kyocera Corp. (Japan; PV solar cell manufacturer and semi-conductors for solar systems). SunPower rose 39.3% since we bought shares in the 3rd quarter; Panasonic was up 21% after our purchase in the 4th quarter; Kyocera shares gained 9.78% for the year.

Renewable Energy Power Producers: This is our core group of holdings, comprising just over 34% of our total portfolio. Four of our six new holdings (Brookfield Renewable Energy Partners, Enel Green Power, NRG Yield and Pattern Energy Group) are in this category. These companies usually have solid, stable earnings from long term power purchase contracts. Recently, our Spanish firms — Abengoa SA (biomass, solar thermal, recycling, desalinization), Acciona SA (wind, small hydro, solar thermal, water treatment), EDP Renovaveis SA (wind and ocean power projects) and Elecnor SA (wind and solar projects, electric transmission facilities) — have been pushed down by Spanish government policies rolling back and eliminating guaranteed power rates and feed in tariffs originally designed to promote renewable energy development. With fewer opportunities in their home market, all these companies have made good use of their experience and expertise to contract for new projects in other parts of Europe, Asia, and North and South America.

Other Gains and Losses: Companies in the Fund that increased their share price during 2013 include Algonquin Power & Utilities Corp. (Canada), up 7.31%; American Water Works Co., Inc., up 13.8%; Elecnor SA, up 18%; Enel Green Power, up 22.7% (added to the Fund in the 1 ^st quarter); Hannon Armstrong Sustainable Infrastructure Capital, up 22.5% (added to the Fund in the 2nd quarter); New Jersey Resources Corp., up 16.7%; NRG Yield, up 46.8% (added to the Fund in the 3rd quarter); Ormat Technologies, Inc. (geothermal energy project developer), up 41.1%; Veolia Environment SA ADR (France; water utility, waste water treatment services, energy management), up 33.7%. Among those

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companies who lost share value during 2013 are: Abengoa SA, -8.9%; Acciona SA, -25.7%; TrustPower Ltd. (New Zealand; wind and hydro power utility), -22.9%; Northland Power, Inc. (Canada; wind, solar and small hydro power developer), -17.1%; Brookfield Renewable Energy Partners, -10.6%; and Hyflux Ltd. (Singapore; water purification & desalinization projects), -8.6%.

Cash and Treasury Holdings: We ended the year with approximately 6.1% of net assets in cash. We owned no short-term U.S. Treasury Bills as interest rates were too low.

Income from Dividends and Interest: The Fund’s net income from dividends and interest decreased by 3.2% in 2013. The per share dividend decreased from $0.67 in 2012 to $0.58 in 2013.

Expenses: The Fund’s cost of operations increased in 2013. The number of shareholder accounts decreased and the net assets increased during the year. The amounts paid to the investment advisor, Accrued Equities, Inc. (the “Advisor”), The Bank of New York Mellon (the Fund’s custodian) and BNY Mellon Investment Servicing (U.S.), Inc. (the Fund’s accounting agent, transfer agent and administrator) are largely based on net assets. The Fund’s net assets increased gradually during the year. BNY Mellon, in its role as transfer agent, bases its fees on the number of shareholder accounts established during the year. While this figure decreased slightly, it was allocated across fewer outstanding shares which raised the Fund’s expense ratio from 1.10% in 2012 to 1.12% in 2013. Total Fund Expenses increased by $15,801 or 0.8%.

Realized and Unrealized Capital Gain/Loss : The Fund did not have or distribute any net realized capital gains during 2013. The Fund ended the year with accumulated net unrealized gains of approximately $27 million.

Corporate Governance and Regulatory : All seven of the Fund’s directors (five of whom are considered “Independent”) were re-elected by shareholders at the annual meeting held on September 27, 2013. David Schoenwald will continue as President, Treasurer and Chairperson of the Board, Sharon Reier as Vice-Chairperson and Murray Rosenblith as Secretary. Joseph Don Angelo continues to serve as the Fund’s Chief Compliance Officer. Preston Pumphrey was continuing to serve as Chairperson of the Audit Committee but he subsequently resigned from the Committee and the Board in January, 2014. Susan Hickey was appointed to take his place as Chairperson of the Audit Committee.

The Fund’s directors re-approved the investment advisory agreement (the “Advisory Agreement”) with the Advisor, Accrued Equities Inc., at the directors meeting on June 28, 2013.

The Board of Directors, including a majority of the Independent Directors, decided to approve the renewal of the Advisory Agreement for a one-year period commencing July 1, 2013 based upon their evaluation of: (i) the long-term relationship between the Advisor and the Fund; (ii) the Advisor’s commitment to the Fund’s socially responsible investment objectives and its ability to manage the Fund’s portfolio in a manner consistent with those objectives; (iii) the depth of experience and expertise of the Advisor with regard to the alternative energy market; (iv) the nature, extent and quality of the services provided; (v) the performance of the Fund; and (vi) the costs of the services provided and the profitability of the Advisor from its relationship with the Fund. Information regarding the material factors the Board considered in approving the Advisory Agreement is included in the Semi-Annual Report to Shareholders dated June 30, 2013.

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New Alternatives Fund launched an on-line account access portal on our web site in the first half of 2011. Shareholders can now register their accounts and access share balance and transaction information, enter address changes and choose an “e-delivery” option for their statements and Fund documents. If you haven’t already done so, you can go to the Fund’s web site at www.newalternativesfund.com and click on the “Account Login” link to create your on-line access and select your document delivery options.

Strategy: The Fund’s investment objective remains unchanged. We continue to seek long-term capital appreciation. The Fund seeks to achieve its investment objective by investing in equity securities. The equity securities in which the Fund invests consist primarily of common stocks. Other equity securities in which the Fund may invest include depository receipts, real estate investment trusts (“REITs”) and publicly-traded master limited partnerships (“MLPs”). The Fund makes investments in a wide range of industries and in companies of all sizes. The Fund invests in equity securities of both U.S. and foreign companies, and has no limitation on the percentage of assets invested in the U.S. or abroad. Under normal market conditions, at least 25% of the Fund’s total assets will be invested in equity securities of companies in the alternative energy industry.

“Alternative Energy” means the production and conservation of energy in a manner that reduces pollution and harm to the environment, particularly when compared to conventional coal, oil or nuclear energy.

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New Alternatives Fund Growth of $10,000 vs. The S&P 500 ^® Index

(Unaudited)

Performance quoted represents past performance and does not guarantee future results. Investment return and principal and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than that shown here. The performance quoted reflects a deduction for the maximum front-end sales charge of 4.75%. Returns include the reinvestment of distributions. Performance data current to the most recent month-end may be obtained by calling 800-423-8383. The graph and table do not reflect the deduction of taxes that a Shareholder would pay on fund distributions or the redemption of fund shares.

The Fund’s total annual operating expenses, as stated in the current prospectus are 1.10%*.

The S&P 500 ^® index is an unmanaged stock market index and does not reflect any asset-based charges for investment management or transaction expenses. You cannot invest directly in this index. Current and future portfolio holdings are subject to change and risk.

* Per prospectus. The expense ratio presented above may vary from the expense ratio presented in other sections of this report which is based on expenses incurred during the period covered by this report.

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NEW ALTERNATIVES FUND, INC.

FUND EXPENSE EXAMPLE

(Unaudited)

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs such as the sales charge; and (2) ongoing costs, including management fees and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

The example is based on an investment of $1,000 invested at the beginning of the period shown (July 1, 2013) and held for the entire six months ended December 31, 2013.

Actual Expenses

The first line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expense that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Six Months Ended December 31, 2013” to estimate the expenses you paid on your account during this period.

Note: The Fund’s Transfer Agent, BNY Mellon Investment Servicing (US) Inc., charges an annual IRA maintenance fee of $15 for IRA accounts. That fee is not reflected in the accompanying table.

Hypothetical Example for Comparison Purposes

The second line of the table below provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs such as the sales charge, redemption fees or exchange fees. The Fund does not charge any redemption fees or exchange fees, but these may be present in other funds to which you compare the Fund. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if transactional costs were included, your costs would have been higher.

* Expenses are equal to the Fund’s annualized expense ratio for the six-month period of 1.06%, multiplied by the average account value over the period, multiplied by the number of days (184) in the most recent fiscal half year, then divided by the days in the year (365) to reflect the half year period. The Fund’s ending account value on the first line in the table is based on its actual total return of 20.82% for the six-month period of July 1, 2013 to December 31, 2013.

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