A TINY Cleantech Option

I've written before about how the much-buzzed fields of alternative and renewable energy, a.k.a. "cleantech," might represent the "biggest economic opportunity of this century." But I've also warned that the field could be close to experiencing a bubble. That fear has led me to concentrate on companies that invest in alternative energy, but don't pin their entire fortunes on it, including GE (NYSE: GE); BP  (NYSE: BP), Siemens (NYSE: SI) and Goldman Sachs (NYSE: GS). Now I'd like to offer yet another firm offering a slightly more aggressive -- and risky -- way to dabble in alternative energy: familiar Fool favorite Harris & Harris (Nasdaq: TINY).

This venture capital firm and Motley Fool Rule Breakers pick makes early-stage investments in private nanotechnology-related start-ups. At present, only five of the 31 companies in its portfolio can be considered legitimate cleantech plays:

• Bridgelux, developing light-emitting diodes for use in solid-state lighting.
• Innovalight, an early-stage company developing thin-film solar modules.
• Nanosys, seeking to apply nanotech-based applications to fuel-cell and solar-cell technology.
• Nextreme Thermal Solutions, a creator of thermoelectric components.
• Solazyme, a biotechnology company tapping the "applied evolution" of algae to manufacture environmentally friendly biofuels.

All of these firms face considerable competition. For example, Bridgelux is going against the likes of Cree (Nasdaq: CREE) and Color Kinetics (Nasdaq: CLRK), while Innovalight must prove its technology superior to that of Nanosolar and Miasole. Not all of these companies will survive, but a few might just hit it big. Nanosys, for one, has proved that it can establish key relationships with major corporations. And so far, Solazyme and Greenfuel Technologies are the only companies attempting to create an algae bioreactor.

To be sure, there are more strategic methods of investing in cleantech, including specialized ETFs like PowerShares WilderHill Clean Energy Portfolio (AMEX: PBW). But for investors with a stronger penchant for risk, Harris & Harris is worth considering; in addition to its promising nanotech holdings, it might be housing a cleantech gem.

Interested in cleantech-related foolishness? Check out these articles

• EnerNoc's Not Yet at Peak Demand
• A New Power Play: Negawatts
• Cleantech Rocks, But It's Still Just a Bill
• Houston, We Have an Opportunity

Harris & Harris and PowerShares WilderHill Clean Energy Portfolio are both Motley Fool Rule Breakers recommendations. Discover all the cutting-edge picks from David Gardner and his team with a free 30-day trial subscription.

Fool contributor Jack Uldrich owns stock in Harris & Harris and GE. The Fool has a very clean -- and very strict -- disclosure policy.