Cleantech VC Bounces Back In 3rd Quarter

After a worrisome second quarter, cleantech venture capital bounced back in the recently concluded third quarter, according to Ernst & Young. The accounting firm, again crunching data from Dow Jones VentureSource, said U.S. VC investment in cleantech companies increased 73 percent, to $1.1 billion, compared to the year-ago quarter, and that the number of deals jumped 36 percent.

The energy storage sector drove activity, raising $421 million. Within the sector, fuel cells led the charge, totaling $225.5 million in investment. Bloom Energy accounted for a good chunk of that change, raising $150 million.

third quarter 2011 cleantech venture capital

image via Bloom Energy

“Confidence in cleantech investing continues despite the challenging investment market,” Jay Spencer, Ernst & Young’s Americas Cleantech director, said in a statement. Spencer said the hot quarter for energy storage “reflects a growing corporate focus on proactively managing their energy mix.”

Regionally, California, as is typically the case, was the top spot for cleantech investment. In fact, more than half the capital invested in cleantech in the third quarter – $583 million – went to California. Massachusetts was next at $170.4 million. Other big movers among the states were Pennsylvania and Oregon, Ernst & Young said; those states saw investments more than triple since the third quarter last year 2010, “bringing their Q3 2011 investment levels to $85.4 million and $73.5 million, respectively.”

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.