In keeping with tradition, this is the time of year for predictions. According to the National Venture Capital Association, who surveyed 170 US venture capitalists, 80% predicted that cleantech venture investment was set to see a rise again in 2008. Perhaps an unsurprising prediction, but less easy to predict is what will shape the direction of investment in the coming year.

Allied with the business view of increasing attention to clean technology, the political climate is certainly upping the anti, with pressure on international governments to take real meaningful action. Whilst recent developments at the Bali conference on climate change did not cement any firm actions, there was unanimous agreement to cut global emissions, as a basis for further negotiations. Whilst this may seem a minor step, given it is agreement made with near global representation, it is as the UK environment secretary Hilary Benn described, a “historic breakthrough”.

Whilst the Goliath of the global community moves slowly, it is likely that 2008 will see much more focused leadership from national governments, and not just in Europe, with policy and legislation being an important force in helping to accelerate market adoption of some clean technologies. Investors would be wise to keep an eye on the moves of governments in assessing the fertility of different regions for different technologies.

A case in point, energy shortfall and dwindling domestic coal reserves has led the Indian government to pursue incentive policies and feed-in tariffs to help drive the use of solar, and other renewables. This combined with new financing models to pay for solar energy adoption is set to fuel greater up-take. Recent indications from the Chinese government has led experts to predict that China too, will begin to represent a significant market for renewables, in particular solar, rather than just a manufacturer. In part this will be stimulated by the 2008 Olympics, where China is expected to go some way to playing down its growing reputation as a major global polluter by installing flagship clean energy projects.

Solar seems an apt area for further predictions in 2008, off the back of news this week that Nanosolar, one of the leaders in solar technology, is now selling what it describes as “the world’s lowest-cost solar panel”. Nanosolar focuses on so called “third wave” solar technology that uses thin film materials, rather than silicon. The bold claims seem timely, given news this week that silicon demand for the solar industry has outstripped demand from the semiconductor industry. Despite this increasing demand silicon costs are expected to fall in 2008 providing greater advantage to the less advanced, but traditional silicon based solar panels.

These competing forces in solar are likely to play out in 2008, with established silicon technologies seeking to gain ground in installations before newer thin film based solar technologies can gain traction in the market. How this trend plays out in the longer term remains to be seen, but with claims of greater efficiency and lower costs being linked to newer thin film technologies, it seems substitution seems inevitable, but this may take years.