There's plenty of reason to worry about investment in green technology in the short term –a global economic slowdown, tightening of credit from investors, cash-strapped government budgets and the falling price of oil.

But thinking of these short-term challenges shouldn't distract investors from the longer-term promise for green technology as the only way to solve the world's unprecedented energy and resource shortages, Ira Ehrenpreis, a general partner in Palo Alto, Calif.-based Technology Partners, said Wednesday at the Cleantech Investor Summit in Palm Springs.

"Amid the financial meltdown and financial crises, cleantech has evolved," Ehrenpreis said. "Cleantech isn't about this year, or next year, it's about the next 100 years."

Ehrenpreis and the hundreds of fellow investors and entrepreneurs at the event should hope he's right. While green technology saw a record $8.4 billion in investment in 2008, investment in the fourth quarter of the year fell 35 percent from the third quarter, to $1.7 billion, the smallest quarterly total in the past year and a half, according to Cleantech Group.

GTM Research recorded different figures of 2008 investment of $7.7 billion, $2.5 billion of it in the fourth quarter.

It's easy to see why. Amid an economic downturn that could match the Great Depression in intensity, credit for large-scale renewable power projects has all but dried up.

That's left venture capitalists, who invested more in solar and biofuel companies than any other sectors last year, worried that their next steps – taking a company public or securing hundred-million dollar financing for large-scale construction projects – may be closed to them.

Still, there are plenty of areas to invest in, he said.

"Today we see material investments in energy infrastructure and the smart grid," he said "Coal accounts for half our energy production in the United States, but it needs to be cleaner And water ... may prove to be the source of more conflict than even petroleum."

"We see huge opportunities in areas like green building, [energy] storage and water that have been overlooked until today," Ehrenpreis said.

"Traditional energy companies spend less than half of one percent of their sales on R&D," Ehrenpreis noted. "But here, the challenges begin to look like opportunities."

Even solar and biofuels can be investment-worthy, if they offer different ways to profitability, he said.

"Given where the capital markets are today, for smart companies the crisis is giving them the chance to innovate" through creative tax-efficient structures, new financing and leasing models, and licensing technology instead of build-and-operate models, he said.

Other VCs speaking before Ehrenpreis's speech agreed with this premise.

"Even if there's plenty of capital, projects financing won't be there for the first plant," said Tim Woodward, managing director of Nth Power. This forces companies to find "creative business models that can play in batteries, solar and fuels," which can be very capital-intensive projects to invest in, he said.

Or, as Martin Lagod, managing director of Firelake Capital Management, put it: "These are IP investments," promising an opportunity to license new technology to better-funded companies or otherwise contribute technology without the need to raise masses of money for project construction.

Technology Partners has invested about half of its $750 million portfolio in a "microcosm" of this range of green technology companies, he said. That includes electric car startup Tesla Motors, CoalTek, "next-generation" nickel zinc battery developer PowerGenix, methanol fuel cell developer PolyFuel, biodiesel maker Imperium Renewables.

How those investments will fare, both in the next year and the next hundred years, remains to be seen.