For investors sticking with “cleantech,” it could be the best of times (just don’t call it cleantech)

The “death of cleantech” has been the topic of much discussion over the past few months. Whether you think the sector will emerge from “the trough of disillusionment” with an evolved strategy and moniker, or if you think the sector is gone for good, it’s hard to ignore metrics like the fact that venture capitalists invested a third less in cleantech startups in 2012, compared to 2011.

But for investors that still believe in the underlying trends of cleantech — the fairly obvious notion that the world will one day need better management tactics for resources like energy, food and water — the so-called “cleantech cliff” actually has some noteworthy silver linings. The most important one of those is that there’s just not that much competition out there anymore for investors to find and fund new startups in clean power, smart grid, energy storage or tech for more sustainable transportation.

Back in the years between 2006 and 2008, investors had to compete with their peers for the chance to fund promising young cleantech companies. These were frothy times and the startups’ valuations were often higher than the investor wanted. This was the age that produced crazy-high valuations for companies like Solyndra, Nanosolar, Fisker Automotive, and others.

In contrast 2013 is basically an open field for investors that are sticking with cleantech investing. Valuations haven’t just dropped back to earth, they’re running below market value. If you believe in this sector, there’s undoubtedly some really great deals out there.

Lux Capital’s Peter Hebert, whose firm just closed on its third fund, which will partly be dedicated to investing in energy technology, described another positive affect of the weeding-out process as “people in it today are there for the right reasons: passionate, want to build real companies, not just flippers, hucksters and passers-by.” The entrepreneurs and company builders are also a lot more rational, said Hebert.

For Khosla Ventures Andrew Chung, investors that have built a substantial portfolio in energy, resource management and sustainability could use the “network effect” for their benefit during this time. The relationships we built with corporate partners, star executives, private and public funding sources can all serve to benefit multiple companies, said Chung.

Khosla Ventures is also betting that the move away from backing cleantech companies — and companies that innovate around the underlying trends — is cyclical. “Venture is highly cyclical business, and we expect sustainability investments to experience a renaissance as today’s breakthrough companies successfully commercialize and have massive impact on society’s infrastructure,” Chung wrote.

Still, it can be lonely out there for investors that stick with it. And that means there’s fewer investors willing to partner with firms like Khosla Ventures and Lux Capital for follow-on rounds. VCs commonly need partner with other investors for larger rounds.

Chung said that just means they have to be more creative and patient in finding sources of funding, often tapping global investors who continue to have enthusiasm and corporate investors who can provide strategic benefit alongside capital. Khosla also has set up multiple funds so that the firm can do early stage seed investments, and then follow-on with larger rounds for companies that hit milestones and show promise.

While it could be the best of times, there are a couple of other hurdles that loyal investors will face. Hebert said that alongside fewer investors, there are fewer entrepreneurs, as some entrepreneurs have moved onto greener (easier) pastures. In addition, there’s more pressure on the investor — from both limited partners and general partners (not focused on energy and cleantech) — to produce returns for the companies that they’ve been nurturing for years.

Then there’s the situation that word “cleantech” itself has become rather toxic, as 2013 gets underway. Investors like Lux Capital and Khosla Ventures are not using this term; they call their portfolio companies in this space “energy tech” and “sustainability investing.”

So if cleantech does come back, it’ll have to have a new and improved brand.