Jan 6 - McClatchy-Tribune Regional News - Dana Hull San Jose Mercury News, Calif.


Venture capital firms invested at least $5.6 billion in clean technology in 2009 in North America, Europe, China and India, according to a preliminary tally announced Wednesday by the Cleantech Group and Deloitte.

That number is expected to rise as final deals from the last weeks of the fourth quarter are included.

Though venture investment was down 33 percent from $8.5 billion invested in 2008, investment in clean tech declined less than other sectors like software and biotech. And 2009 is on track to be a record year for the number of clean-tech VC deals -- 557 so far.

"Though much of the economy struggled in 2009, clean tech had a pretty good year," said Dallas Kachan, managing director of the Cleantech Group. "Clean tech went from being a niche category for investors to a dominant category, and 2009 will go down in the record books as a pretty good year."

 The top clean-tech sector for venture investment in 2009 was solar, which accounted for 21 percent of total clean-technology investments.

But transportation and energy efficiency -- defined as lighting, green building materials, glass and smart-grid components like advanced metering -- were close behind, at 20 percent and 18 percent.

VC investment in solar is widely seen as dropping off: Solar investment in 2009 was down 64 percent from the previoius year. Transportation and energy efficiency had record years in 2009, and are on track to eclipse solar in 2010.

"In 2009 there was a pullback and realization by investors that because of the capital intensity of solar, there may be safer places to put their money," said Scott Smith, U.S. clean tech leader for Deloitte. "There's still a lot of solar investments, but they are much smaller."

Four of the top five largest clean-technology funding rounds in 2009 were in U.S.-based companies. The top was Solyndra, a Fremont thin-film solar company, which raised $198 million.

Contact Dana Hull at 408-920-2706.

CLEAN TECH INVESTMENT IN 2009

Solar: $1.2 billion or 21%

Transportation: $1.1 billion, 20%

Energy efficiency: $1.0 billion, 18%

Biofuels: $554 million, 10%

Smart grid: $414 million, 7%

Water :$117 million, 2%

Source: Cleantech Group

(c) 2009, McClatchy-Tribune Information Services