2010 CleanTech Investment Trends

Last month CleanTech released it’s CleanTech Investment Monitor 1Q 2010 Report. CleanTech’s Investment Monitor is a  quarterly report on cleantech investment trends. Last month’s report highlights the growth of cleantech markets, particularly in energy efficiency. Some of the report’s key findings:

“VC funding continues to bounce back led by North America.”

Global cleantech venture investment for the first quarter of 2010 reached $2.1 billion — the highest quarterly investment total since 3Q08. North America had 82% of the share of the investment total.

“Transportation and energy efficiency lead the way in sector preferences.”

Although the amount raised by energy efficiency companies, $296 million, was down 5% from 4Q09, the most number of deals for the quarter was in energy efficiency, at 42 deals.

The report states, “Of the top three sectors this quarter, it is energy efficiency where we continue to see the strongest interest on a forward looking basis, particularly focused on the buildings segment.”

The report goes in to say that the increase in investment in lighting is because of the following factors:

  • Exit opportunities: Because the major players are eager, there are various exit opportunities for investors.
  • Government stimulus finding: Tax incentives and regulatory changes are making energy efficiency an appealing investment category.
  • Market size: Many energy efficiency technologies have very large market opportunities.
  • Energy efficiency theme: There is an overall move towards energy efficiency as a cleantech investment category.

“Utilities and corporates continue investing in cleantech.”

Corporate direct investments announced during the first quarter of 2010 increased by 140% from 4Q09.

Utilities are focusing on increasing direct investment in alternative energy generation and smart grid projects because of government incentives, improved market conditions and in order to comply with standards.

The report states, “Companies continue to invest and integrate cleantech to improve energy efficiency and reduce carbon emissions in order to reduce costs, mitigate energy price volatility risk, and comply with existing and pending regulations around carbon and climate change risk disclosure.”

For more information on clean technology investment trends, CleanTech clients can download the report here.