By early 2008, Agassi not only had secured $200 million in venture capital but also had signed the government of Israel and the automaker Renault-Nissan as partners. At the launch event in January of that year, Agassi stood next to Israel Prime Minister Ehud Olmert and Renault-Nissan CEO Carlos Ghosn and explained his vision: "If we can provide the drivers an enjoyable car, that costs less but drives better, a country can build a virtual oil field -- one that works forever, but leaves no footprint on the environment. Such a virtual oil field is more natural than the holes we have been digging into the earth to fuel our addiction to oil." Since then, Nissan announced that it will build, in large volumes, the electric cars for Israel and then to go into other countries and cities that adopt Agassi's vision.

We'll see whether Agassi's vision gets traction, but it's hard to ignore the size and scope of the plan. And it shows how small players with big visions can be competitive in mature markets, such as automobiles, in part by changing the rules of the game, much as their dotcom forebears did a decade earlier.

Or consider the founder of SunEdison, Jigar Shah, yet another entrepreneur who has helped change the business model for solar energy. He started with a basic premise -- the idea of turning free energy from the sun into electricity. This has long been simple and undeniably compelling, but the promise is clouded by a myriad of barriers. The technology is costly relative to conventional electricity and is complicated to install, especially in an existing home. The industry has yet to come up with a truly plug-and-play model roughly equivalent to buying satellite TV, in which a truck pulls up and installs a complete system in a few hours. Instead, solar energy is much more like home remodeling, requiring planning, drawings, and multiple players, often taking weeks.

Perhaps the biggest barrier is the fact that most people -- whether homeowners or business owners -- aren't accustomed to owning their means of electricity generation. That is, we're used to buying electricity as a service, not a product. We don't even want electricity per se so much as the services electricity provides -- lights, television, cold beer, and warm showers. Most consumers and companies lack the capital budgets to pay solar energy's substantial installation costs. Government subsidies, where they're available, can help, but only somewhat. Buying even a small solar system can require outlays of thousands of dollars.

There's also the issue of reliability. Owning a solar energy system means that you're responsible for it. Warranties help, but they don't necessarily guarantee against the system malfunctioning or ceasing to work altogether. Again, this is not the case with conventional electricity, which is maintained by the local utility.

So how do you make solar affordable? One way is to transform it from a product into a service -- selling solar energy instead of solar systems. Enter Shah, who left BP Solar in 2003 to start the company. Under his scheme, SunEdison finances, installs, owns, operates, and insures solar panels and systems on a customer's roof. In return, customers sign purchasing contracts that lock in the current price for as long as 20 years, creating a steady revenue stream for SunEdison.

Customers get electricity at a fixed cost on a long-term basis, something few traditional energy utilities can offer. The company's focus began with commercial industrial rooftops -- Wal-Mart hired the company to put solar panels on the roofs of several of its stores -- but since has expanded into constructing utility-scale solar installations. The business model Shah pioneered is now being copied by other firms.

Of course, this isn't just an opportunity for little guys hoping to get big. Many of the world's biggest companies are innovating around green and clean technologies, sometimes investing significant sums with no immediate expectation of returns. They know that the markets for cleaner, greener products, processes, and services will come and that they will not necessarily be small, niche markets. They also understand the importance of having good stories to tell investors, employees, activists, the media, and others about the company's commitment to a better future and a cleaner world. A few of them will set the standard by which the rest of the business world -- and all of us -- will play. Many others will follow.

A growing number of green-economy entrepreneurs are to be found in China, India, and other developing markets. China's richest woman, Zhang Yin, owner of Nine Dragons Paper in south China's Guangdong Province, made her estimated $3 billion fortune recycling scrap paper imported from the United States. At the other end of the scale are countless entrepreneurs throughout India, Africa, and Latin America who are similarly turning waste into industrial feedstocks or deploying small-scale solar or other renewable-energy technologies at the village level to bring lighting, refrigeration, sanitation, and telecommunications to millions who lack them. The profits from such enterprises transcend financial remuneration.

So who will win in the green economy? Will large companies be the only ones with sufficient scale to move the needle on climate change and other problems or -- as with computers and Web technologies -- will audacious newcomers and small-scale social entrepreneurs trump experienced but stodgy incumbents?

No one really knows, of course. Because the green economy includes the full spectrum of products and services -- and the transformation of existing business processes and models as well as the creation of new, breakthrough ones -- there likely will be room for everyone to play. But success will require innovative thinking, a firm understanding of the marketplace, a willingness to create new models, and more than a little patience.

Joel Makower is executive editor of GreenBiz.com.

Excerpted with permission from Strategies for the Green Economy, by Joel Makower, published by McGraw Hill. © 2008 Joel Makower.