Many of the newest alternative energy startups are operating on the scientific frontier, while some are content with simply tweaking existing technologies. But companies in this latter group "have been gobbled up, and now we're looking at the deep science plays," says Maurice Gunderson, a venture partner with CMEA Ventures.

Gunderson, who has invested in energy companies for three decades, including public concerns such as Evergreen Solar Inc. of Marlboro, Mass., and Chatsworth, Calif.-based Capstone Turbine Corp., says future energy development will be science-driven and require knowledge from unrelated disciplines. For example, breakthroughs in biofuels require expertise in biochemistry, chemical engineering, sensor-based automated process control, agriculture and biotechnology, as well as in fuel properties and internal combustion engines.

For investors sizing up emerging cleantech products, that means one thing: Hedge your bets.

"Because a lot of these technologies are new and some of them are reasonably far out in commercialization, you've seen a lot of portfolio-based financing," says Tom Halverson, a managing director at New York's Piper Jaffray & Co. "It's not really easy to pick the winner yet, so while people think they're investing in great business propositions, they're actually investing very broadly."

Figuring out which renewable energy technologies have the greatest utility and commercial potential is something of a crapshoot. But the contour of the industry is already taking shape, and promising new startups are beginning to emerge from the fog.

With that in mind, here are five clean technologies, ordered according to their near-term commercial potential, that we expect to take root, along with some of the key startups in each sector. If the history of innovation is any guide, some of these fledgling firms, ranging from bootstrapped garage projects to angel- or government-funded ventures, will stake a claim to their share of the clean tech rush.

3G solar

Solar power is well-trod ground for investors, with several high-profile initial public offerings in the past couple of years, including those by Q-Cells AG of Thalheim, Germany, SunPower Corp. of San Jose, Calif., and Suntech Power Holdings Co. Ltd. of Wuxi, China.

Now marks the beginning of the third generation of solar-power companies, with the greatest opportunities lying in advanced solar panel design. These products and companies address some major hurdles in using traditional panels, including needing a large surface area on a building's roof and having to face the sun to operate effectively.

Several new approaches solve some of the space and direction issues. Cambridge, England-based HelioDynamics Ltd. is working on manufacturing rotating parts that can follow the sun as it moves across the sky. Energy Innovations Inc. of Pasadena Cal-if., which has raised $29 million, and crosstown peer Practical Instruments Inc. are making "concentrators" that use mirrors to focus sunlight more precisely. Lowell, Mass.-based Konarka Technologies Inc., which has raised about $60 million in venture capital, and HelioVolt Corp. of Austin, Texas, are working on materials other than traditional silicon, such as copper indium gallium selenium, and developing processes that allow solar cells to be printed onto surfaces other than roofs, such as windows.

Fuel cells: hot and cold

Fuel cells -- electrochemical energy conversion devices similar to batteries except that they require a constant source of chemicals to function -- remain impractical. The essential problem is that the chemical reactions either generate too much heat or require supercool temperatures. Engineers are trying to develop materials that can function at cooler temperatures and ways to insulate the chemical reactions from intense heat.

One answer to this problem could be nanomaterials. Carbon nanotubes have excellent insulating properties, while other nanomaterials might reduce the requirements for expensive catalysts, such as platinum. Promising companies in the field include CTP Hydrogen Corp. of Westborough, Mass., and Malvern, Pa.-based Franklin Fuel Cells Inc.

Corn and cow pies

If you want to get picky about it, even fossil fuels such as oil are "renewable." But the goal in developing new energy sources is to harvest energy that doesn't take a million years before it's reusable. To this end, much hope is riding on biofuels, which take readily produced organic matter -- corn, garbage, even cow manure -- and turn it into fuel.

Corn-based ethanol is, while well established, very inefficient. According to the U.S. Department of Energy, such ethanol yields only 30% more energy than is used to make it in the first place. Other plants, such as sugarcane and trees, yield much more energy, but breaking down their high levels of cellulose is more expensive. These plants, along with corn, can be used to make so-called cellulosic ethanol. Many experts believe the solution lies in developing enzymes that can be engineered into cellulose-rich plants to make them easier to convert into fuel.

Companies exploring this technology include Cilion Inc. of Goshen, Calif., which has raised $200 million, Cambridge, Mass.-based Mascoma Corp., which has attracted almost $40 million, and Edenspace Systems Corp. of Dulles, Va. Crops that use the enzymes are in pilot production and could hit the market later this year.

Another potential source of biofuel is the methane stored in garbage and animal waste. Startups such as Boston-based Ze-gen Inc. are paving the way for methane-to-power conversion. The plan is to generate power from these sources and then inject it back into the electric grid. Later this year, for example, California is scheduled to accept power from cow dung.

Even pond scum may one day have a role to play. GreenFuel Technologies Corp. of Cambridge, Mass., which has raised $20 million, and others are working on generating biofuel from algae.

Catch the wave

Harnessing the natural power of waves may sound, like, totally awesome, dude, but ultimately the obstacles may prove impossible to overcome in all but the most ideal locales, such as the coasts of Scotland and Oregon. Among the main challenges are where to place turbines and how to protect them from saltwater corrosion.

Another hurdle is the strict government regulation of such projects because of the potential environmental impact on coastlines.

Still, New York's Verdant Power LLC and Ocean Power Delivery Ltd. in Edinburgh, Scotland, which has raised $39.5 million, are vying to develop wave power technologies.

A mighty wind

General Electric Co.'s wind turbines have been providing renewable energy for decades, but the turbines are huge -- up to 100 meters high -- and they must be positioned to face winds that blow at a minimum of 12 miles per hour.

These turbines have drawn fire from residents and environmentalists who say the equipment endangers birds. Companies including Flagstaff, Ariz.-based Southwest Windpower Inc., which has raised $10 million, and Reno, Nevada's Mariah Power Inc. are developing smaller, less hazardous designs for residential areas.

Even more innovative, some startups are striving to develop kites and balloons that can generate wind power. For example, Magenn Power Inc. makes floating wind turbines that the Ottawa company says are superior to conventional turbines.

Any of these renewable energy technologies could pan out -- or fall flat. Says Andy Karsner, assistant secretary for the Department of Energy's Office of Energy Efficiency and Renewable Energy, "There will not be an oil to replace oil. All of these technologies will come into play. ... We will have a mix, and the market will be the allocator of where they go."

Indeed, anyone with a good idea for how to produce energy that helps clean up the earth's atmosphere can vie for the $25 million Virgin Earth Challenge prize offered by British financier Richard Branson and former Vice President Al Gore.

For investors, of course, the potential reward, and risk, of jumping into clean technology are much bigger than that. Gentlemen, start your engines.

35 startups to watch