"You're seeing all the big players and the investment banks getting into it," Cuddeback said. "Everybody rushes in because they don't want to miss a good opportunity."
The rapid growth has triggered concern that the cash is coming too fast to an industry still getting its footing. Some experts have warned that the race to build biofuel plants will produce a glut and, ultimately, a shakeout not unlike what happened to telecommunications and high-tech firms in the 1990s.
"The energy technology and clean technology sector is offering a Wild West-type gold-rush investment opportunity," said Mark Donohue, founder and general partner of Expansion Capital Partners. These days his firm, which has more than $60 million under management, 40% in clean energy, is focusing less on biofuels because of concerns the sector is overpriced.
Cuddeback acknowledges that over-investment is inevitable in this environment. But overall, he said, "this is an industry that is growing responsibly."
Larry Gross, chief executive of Altra, rejects the notion of a tech-like bubble. Gross, the brother of high-tech entrepreneur and Idealab founder Bill Gross, was president of Knowledge Adventure and vice chairman of Idealab.
"A lot of the high-tech things -- and I was involved in them, so I can speak firsthand -- were the promise of revenue in three to five years," Gross said. "This is very different. This is 'make money now.' "
Altra's focus is ethanol, a liquid made from corn that is today used mostly as an additive to gasoline. Proponents note that it burns more cleanly than gas, though motorists sacrifice a bit in terms of mileage; it comes from a renewable source; and, unlike any fuel derived from oil, it does not have to be imported.
The company has broken ground on an ethanol production plant in Ohio and recently acquired California's largest ethanol plant in Goshen, south of Fresno, where it plans to expand production by nearly 30%, to 35 million gallons a year.
A growing number of cars and trucks have been engineered to run on a mixture of 85% ethanol, known as E85, and a federal biofuels mandate could nearly double total consumption by 2012.
Donohue, for his part, is focusing on less-visible technologies that boost energy efficiency.
"That is not to say that solar and biofuels are not going to be successful," he said. "The reason the valuations are high today for many of those companies is that the sector is going to be successful, and the drivers are very much in their favor."
