"At the end of the day, there has to be financial incentive for people to make an investment in the sector, and there is," says Patrick McCloskey, managing director of Evolution Markets Financial Services, which provides banking services to clean energy companies and their investors. "John Doerr [of Kleiner Perkins] and Vinod Khosla wouldn't be spending the time in the energy sector unless there was financial gain to be made."

Investors seeking a measure of how these companies might fare can look at the significant returns from the generation of alternative energy companies started in the 1990s.

Last year, Goldman Sachs made $900 million from its two-year investment in Horizon Wind Energy after it sold the wind farm to a Portuguese power company for $2.2 billion. And First Solar, a Phoenix-based manufacturer of "thin-film" equipment for collecting solar energy, went public in November 2007, raising $400 million and handsomely rewarding its backers like True North, an investment firm founded by now-deceased Wal-Mart heir John Walton. (First Solar now sports a market cap of almost $23 billion.)

At Ausra, things are moving ahead at full, uh, steam. Its U.S. steam facility is expected to go online this summer, and the production of its solar mirrors is starting this month. "It's just a matter of time before we begin to deploy on a large scale," says Robert Fishman, the company’s C.E.O. Some studies suggest that the market for the type of energy generated by Ausra could reach $200 billion a year by 2030.

To be sure, the path to success for most alternative energy companies will not likely be as smooth. For one thing, clean energy firms are often heavily dependent on the support of the government, which can be inconsistent.

"The problem is, all this investment is being poured into these firms, based upon the idea the government is going to regulate the heck out of the energy business," says William Yeatman, an energy policy analyst at the free market-oriented Competitive Enterprise Institute. "That's not the best basis on which to guide one’s investment."

In addition, wind and solar energy, which so far have been the energy sources most supported by the government, still face challenges related to energy storage and generation for times when the sun is not out or the wind is not blowing.

Despite these challenges, though, V.C.'s firmly believe that the companies that can eventually roll out their products and technologies on a mass scale will bring huge rates of return. Khosla, for one, says he is "very bullish" on the long-term prospects for clean energy, although he thinks the investment cycle may take as long as 10 to 20 years to play itself out.

"One has to keep perspective in mind," Khosla says. "There are few winners and lots of losers. In 1995, what could you predict about the internet? Almost nothing."

Other V.C.'s, like Mohr Davidow's Straser, believe that we’re only one or two years away from seeing blockbuster I.P.O.'s and billion-dollar acquisitions, particularly as large, established businesses like General Electric and Siemens look to startups for ways to reduce the energy consumption of their products and technologies. In the short term, Straser expects that the solar industry will see a handful of investments in the $100 million to $150 million range to fund the new technologies and expand production facilities.

Just as with the development of the internet, though, there's bound to be plenty of ups and downs in the clean energy business.

"Venture capitalists have a belief that there will be some very large wins here—[but] there's also going to be an awful lot of blood on the floor at the end of the day," says Emily Mendell, vice president of strategic affairs at the N.V.C.A. "The ones that are going to win are going to win very big."