Clean Tech Venture Capital Hits $1.5 Billion in 2nd Quarter

(National Renewable Energy Laboratory)

Venture capital (VC) investment in U.S. clean technology (cleantech) companies in the second quarter of 2010 hit $1.5 billion in 68 financing rounds, according to an Ernst & Young analysis based on data from Dow Jones VentureSource. Automotive, solar, and alternative fuel companies attracted the most investment dollars.

Ernst & Young says this was the highest level of venture funding for cleantech since Q3 2008, which represents a 64 percent increase in capital and an 5% increase in the number of deals compared to the second quarter of 2009. Most of the investment funding was concentrated in the 10 largest deals, which grabbed $993 million or nearly two-thirds of the the total. Almost that same amount — $891 million in 33 deals — went to later stage, as opposed to earl stage, investments.

VC firms made their largest second-quarter clean tech investments in companies building electric cars or the facilities to support them. One deal for $350 million in Better Place, a Palo Alto, California maker of electric vehicle support infrastructure accounted for nearly a quarter (23%) of the total $1.5 billion invested in clean tech.

Five of the 10 largest deals for a total of $439 million were in solar energy companies, including an $180 million investment in BrightSource Energy of Oakland, California that provides solar power to utilities and industrial customers. The largest number of deals — 15 investments for $199 million — were in energy efficiency investments.

Clean technology, as defined by Ernst & Young, covers alternative fuels, non-carbon and non-nuclear based power generation, energy storage technologies, energy efficiency, water, recycling and waste processing, and industry-specific initiatives.