Cleantech VC Falls From Lofty 2010 Level

Here’s yet another sign that U.S. cleantech venture investment – like the rest of the economy – might be running into a slowdown: The second quarter of 2011 saw 44 percent less money pumped into the sector compared to the same quarter one year ago, according to Ernst & Young. The accounting firm, crunching data from Dow Jones VentureSource, said that the number of deals in the second quarter was off 12 percent from 2010.

This news isn’t a shocker. Peachtree Capital Advisors recently reported a similar slide, and before that it was Cleantech Group bearing bad news, although their broader tally showed a more modest 10 percent drop in capital raised in the second quarter of 2011 vs. Q2 2010.

cleantech venture capital, Ernst & Young report

image via Shutterstock

One important point to mention here, however: The second quarter in 2010 was a huge one for cleantech VC, the biggest ever, with five deals alone adding up to nearly a billion dollars and total investment landing at $1.9. That’s what made Q2 2011’s $1.1 billion figure – which was actually up 8 percent from the first quarter of the year – look especially puny.

“Cleantech financing levels remain strong in the context of investment levels over the past several quarters,” said Jay Spencer, Ernst & Young’s Americas cleantech director. “We’re seeing continued commitments to solar, electric vehicles and energy efficiency technologies from the venture community, as well large corporate and private investors.

A couple of other interesting nuggets from Ernst & Young: With $548.8 million in investment, California companies accounted for 51 percent of dollars raised in the quarter. The accounting firm also noted that the US.. Department of Energy was active with the expiring loan guarantee program, announcing guarantees or conditional signoff worth $32 billion to 32 clean-energy project, including $10 billion in loan guarantees for solar projects.

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Pete Danko is a writer and editor based in Portland, Oregon. His work has appeared in Breaking Energy, National Geographic's Energy Blog, The New York Times, San Francisco Chronicle and elsewhere.