Cleantech venture-capital investments appears to be waning, despite increased mergers and acquisitions among green tech firms, a new report from Peachtree Capital Advisers says. The midyear report by the New York-based investment bank said economic uncertainty and the prospect of losing federal subsidies – especially as funds from the 2009 stimulus expire – have discouraged venture capitalists from green technology investments.
“The paralysis and cyclical shifts that have plagued U.S. energy policy have dampened investor sentiment while feared cuts in cleantech subsidies threaten to slow growth and innovation,” a Peachtree blog said.
Capital investments in the first half of 2011 were 12 percent lower than they were for the same period last year, Peachtree said. This data mirrors information from Clean Tech Group, which reported last month that cleantech venture investment took a 33 percent tumble from the first quarter to the second quarter this year.
Meanwhile, the PowerShares Clean Energy ETF – a portfolio of clean energy stocks – fell by 13.4 percent, even as more general stock indices rose. However, corporate investments did rise during the same period. The 8 percent increase from 2010 in mergers and acquisition was led by Google’s big investments in wind and solar projects, while other large technology companies invested in energy efficiency and smart grid-related businesses.
Companies involved in energy storage and efficiency raised the most capital among cleantech firms, followed by solar power, the report said. There were fewer such transactions in those industries, but they came at a greater value, particularly in solar power. It also said that low natural gas prices have also kept wind power investments down. Peachtree’s report also said a rise in initial public offerings by cleantech firms during the first half of 2011 might be due to companies nervous about lower venture-capital investments, leading to uncertainty about newly public companies’ ongoing performance.