In a report issued Thursday, Cleantech Group LLC says that venture capital investment in renewable energy companies in North America and Europe totaled $5.2 billion in 2007, up 44% from $3.6 billion in the prior year.
"High carbon-based energy prices, global resource competition and increasingly favorable policy frameworks provide stronger than ever fundamental drivers for cleantech investors, and we foresee continued growth over 2008 as the cleantech market cycle moves from early adoption to mainstream driver of wealth and job creation," said Nicholas Parker, co-founder and chairman of Cleantech Group, in a statement.
Breaking down the numbers, cleantech investing in North America jumped 38% to $3.9 billion in 2007, from $2.8 billion in 2006, while the number of deals increased to 268 from 233 and the average deal size rose 20% from $12.3 million to $14.7 million. Cleantech investing in Europe grew by 34% to $1.2 billion in 2007 from $915 million, with deal volume rising to 105, from 67.
Energy generation was the top financing category in 2007, with 172 fundings totaling $2.7 billion, followed by energy storage with 20 deals and $471 million, transportation with 20 deals and $445 million, energy efficiency with 41 deals worth $356 million, and recycling and waste with 17 transactions worth $291 million.
Also on Thursday, the American Wind Energy Association says that wind power generating capacity in the U.S. rose 47% in 2007, adding $9 billion to the national economy. Wind projects accounted for about 30% of the entire new power-producing capacity and will power the equivalent of 1.5 million American households annually.
Meanwhile, Google Inc. said it rolled out five programs to combat climate change, poverty, and environmental, health and other threats, including its previously announced initiatives to make renewable energy cheaper than coal and speeding the commercialization of plug-in vehicles. The company also announced it will invest $10 million in eSolar, a company specializing in solar thermal power to replace fuel in a traditional power plant with heat produced from solar energy.
With many cleantech companies moving from the development to production phase, increased public awareness of energy issues and the possibility of more government incentives no matter who wins the next presidential election, the future for the sector is obviously bright. But the capital needs of many cleantech companies are vast, one reason why 2008 should be a banner year for cleantech IPOs. The Cleantech Group's stock index, which tracks 47 leading public cleantech companies, rose 42% in 2007. - David Shabelman
See Jan. 17 story from Reuters
See press release from the American Wind Energy Association
See Jan. 17 press release from Google
See Jan. 10 post in Tech Confidential
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