My Foolish colleague Rich Smith has gazed upon Google's (NASDAQ:GOOG) plan to step into the green energy space, and he hath deemed it dumb. As a resident energy enthusiast here at the Fool, I figured I might as well give my two centiwatts.

There's certainly merit to the argument that companies are best off sticking to their knitting. But if that were always the case, textile company Berkshire Hathaway (NYSE:BRK-B) would have done so quite literally, and never made billions in the insurance biz.

Business success, to a large extent, comes down to smart capital allocation. And given the profit potential of renewable energy, I don't blame Google for positioning itself for a piece of the post-petroleum pie. They're far from the first non-energy company to pony up. Just look at Cypress Semiconductor's (NYSE:CY) seeding of SunPower (NASDAQ:SPWR), or Norsk Hydro's investment in Ascent Solar Technologies (NASDAQ:ASTI).

Everybody's angling for the cleantech edge. A recent report noted that venture capital investments in this field set a new record of $2.6 billion through the first nine months of 2007. Google is really competing with Khosla Ventures and Kleiner Perkins, not ExxonMobil (NYSE:XOM). While a firm like Khosla is better-suited to dedicate its full attention to these opportunities, Google does have a huge pile of cash. That, plus a cute motto, is probably enough to make it as competitive as anyone in the arena.

Finally, I have to take issue with Rich's characterization of energy companies as slow-growing, low P/E stocks. It's hard to find higher-octane companies than the likes of SunPower, with its P/E ratio north of 600, or flourishing First Solar (NYSE:FSLR), which recently reported quarterly earnings growth of nearly 800% over last year. I don't expect Google's measly 50-something earnings multiple to suffer as a result of any potential foray into a massively scalable renewable energy solution.

To put more wattage in your cottage:

Norsk Hydro is an Income Investor selection. Berkshire Hathaway is both a Stock Advisor and an Inside Value pick. You can take a free 30-day trial of any of these newsletters.

Fool contributor Toby Shute doesn't have a position in any company mentioned. The Motley Fool's disclosure policy sticks to its knitting.