Investors in clean tech have reason to celebrate this New Year’s, with two of the sector’s leading U.S. indexes up over 50 percent for the year and analysts still bullish on clean tech’s prospects for 2008.

“I see a five- to 10-year runway ahead of us,” ThinkEquity Partners managing director Jonathan Hoopes said. “The trends are much larger than any one country and are multigenerational.”

Solar companies were the clean tech engines on the U.S. public markets. Shares of Phoenix, Arizona-based First Solar  soared, ending the year up nearly tenfold to close at $267.14. San Jose, California-based SunPower rose 368 percent on the year, closing at $130.39 per share. And Wuxi, China-based Suntech climbed 240 percent, trading at $82.32 per share at the end of trading.

Mr. Hoopes said the relatively large number of solar-focused companies on the market made the category especially attractive to investors in 2007. He also said solar companies benefited from government incentives in many European countries, such as Spain and Germany.

But investors preferring the clean tech shotgun approach—trading in funds that track indexes, or ETFs—made out well, too. PowerShares Wilderhill Clean Energy—which tracks the oldest U.S. clean-tech index, Wildherhill Clean Energy Index—ended the year up 58 percent, to close at $27.69 per share.

First Trust Clean Edge U.S. Liquid—which tracks another clean tech benchmark, the Nasdaq Clean Edge U.S. Liquid Series Index—finished the year up 65 percent, to close at $33 per share.

The Nasdaq Composite Index, by comparison, ended the year up 9.81 percent.

Looking to 2008

There are now some three dozen indexes worldwide in the clean tech sector, said WilderShares founder Robert Wilder, whose clean tech research firm created the index that bears the same name.

Two of the world’s biggest banks launched indexes this year, HSBC’s Global Climate Change Benchmark Index and Credit Suisse’s Global Alternative Energy Index.

This should mean more ETFs tracking those indexes and more opportunities for investors who are leery of putting money into individual stocks, analysts said. Exotic financial products, like options and futures, could soon be available, too.

There are currently only about half a dozen indexes that have ETFs linked to them.

“This just shows the expansion of the market,” said Clean Edge co-founder Ron Pernick, whose research firm manages two clean tech indexes.

Mr. Pernick predicted 2008 would be a good year for energy storage, energy intelligence—such as smart grid technology—and advanced materials within the clean tech sector.

Solar still has strong growth potential, said Mr. Wilder, but he doesn’t expect a repeat of the spectacular gains of ’07.

“It can’t continue because at some point you decouple price and earnings,” he said.

At the close of the market for 2007, SunPower had a price-to-earnings ratio of 658.54; First Solar was at 194.99; and Suntech was 88.90.