Ausra, which develops solar energy for sale to utility companies, is emblematic of the current generation of "clean tech" energy firms that seek to find newer, cost-efficient ways to generate and store energy via renewable sources and advances in fuel cells and related technologies.

The company's core technology, which uses sunlight to drive steam turbines to generate energy, was originally commercialized on a small scale in 2004 in Australia. Last September, Ausra, which was formed in late 2006 to take the technology to a larger scale in the U.S. and worldwide, raised more than $40 million in a first round of funding from blue-chip Silicon Valley venture capital firms Kleiner Perkins Caufield & Byers and Khosla Ventures.

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This isn't the 1970s, when spiking oil costs and heightened concern over energy security caused the spotlight to shine on alternative energy sources and then fade. Nor is this a niche market in which only those with HAVE YOU HUGGED A TREE TODAY? bumper stickers are investing. Many of today’s companies are well-funded, large-scale operations, raising record amounts of capital with an eye toward massive initial public offerings—even as the economy as a whole heads down a shaky path and funding for other risky startups dries up.

Khosla Ventures' Vinod Khosla, a founder of Sun Microsystems, has invested in 45 clean energy ventures since 2004, putting $205 million into nine companies in the first quarter of 2008 alone. And he's far from alone. Venture capital firms sunk $2.2 billion into 166 clean tech firms in 2007, most of which are energy related, according to the National Venture Capital Association. That's up from $1.5 billion invested in 2006, and the pace is only quickening. In the first quarter of 2008, clean tech companies received $625 million in V.C. funding, according to the N.V.C.A.

With global energy demand and alarm about the environment and global warming reaching unprecedented heights, those backing clean energy companies say there's a timely market opportunity in the sector. Global energy needs are projected to be more than 50 percent higher in 2030 than they are today, with China and India accounting for 45 percent of that increase.

"You start to see this rise in enormous appetite for energy, and someone's got to feed that mouth," says Erik Straser, general partner at Mohr Davidow Ventures, a V.C. firm that has invested more than $400 million in clean energy ventures.

Clean energy backers point in particular to the significantly declining costs of developing and producing alternative energy as evidence of the economic viability of these ventures. For example, in the 1970s, large-scale solar energy solutions cost about 30 times more to implement than they do today. And new, larger wind turbines now generate 120 times as much electricity as 1980s' models at a quarter of the cost. Some of the newer technologies promise to bring costs down even further.

"The primary difference between what is happening now and what has happened in prior market cycles is it's now economically feasible and desirable to pursue these types of solutions," says John Balbach, managing partner at Cleantech Group, a network of clean technology investors and companies. "If the outcome is less pollution or reduced carbon or some impact on climate change, that can benefit in a positive way, but the primary [concern] is return on investment."