Venture Cash For Cleantech.
The Cleantech Group LLC and Deloitte report cleantech vent
ure investment totaled approximately $5.6 billion in 2009. This was a big drop of 33% from 2008. Key trends are strong Asian M&A and IPO activity and more VC investment in Israel and Europe. 62% of cleantech investment was in the U.S. (down from 72% in 2008), 29% in Europe/Israel (as noted here Israel, with a total population of about 7 million, is a world cleantech powerhouse) then 9% in China and India combined. Solar attracted 21%, transportation 20% and energy efficiency businesses 18% of total investment. Solar was down 64% from 2008, but transportation and efficiency investment reached record levels.
So what conclusions can be drawn from the data? Well, to begin with, absent some unexpected technological breakthrough, U.S. solar, wind, and biomass industries are substantially (entirely?) tied to favorable government regulations and mandates. Utilities under renewable mandates are behind many solar and wind projects. However, for the reasons highlighted here, mandates are not enough - renewable power generators need regulatory relief from the web of federal and state requirements used by environmentalists and competitors to stop projects. Transportation and energy efficiency businesses, on the other hand, may cash-flow without government subsidy and could be an easier short-term lift for investors.
