Solar Leads Venture Capital Growth
A new report shows modest increases
Solar investments again led the clean energy investment march in the United States, according to a new report on activities in 2010. Electric vehicles have also gained prominence, according to the report issued by Ernst & Young.
U.S. venture capital (VC) investment in cleantech companies increased by 8 percent to $3.98 billion in 2010 from $3.7 billion in 2009, the report says. Deal total also increased by 7 percent to 278, according to an Ernst & Young LLP analysis based on data from Dow Jones VentureSource.
"In comparison to the early days of cleantech, the 2010 U.S. VC investment results reflect a turning point in the industry due to improving credit and capital markets, the deployment of stimulus spending and increasing corporate cleantech adoption," said Jay Spencer, Ernst & Young LLP's Americas Cleantech Director.
That's a marked improvement from the firm's third quarter 2010 report.
The report says the electricity segment raised $1.32 billion in 2010, the most VC funding for the year, which was largely attributed to investments in follow-on solar deals and a second generation of solar companies. Investments in solar in 2010 increased by 77 percent to $1.58 billion. That investment surged in the fourth quarter to $279.17 million, an increase of 129 percent compared to the same period last year.
Cleantech investments still tend to be a California phenomenon. The western U.S., lead by California, continued to dominate national cleantech investment in 2010.The Mountain Region, Pacific Northwest and California collectively completed 154 deals equaling $2.76 billion in 2010. The Northeast, Mid-Atlantic and Southeast regions of the US jointly secured 74 deals, which amounted to $625.79 million.
With much of federal stimulus having worked its way through the system, the momentum in 2011 will be interesting to track.
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