This blog brings significant updates to my previous two blogs on Cleantech showing (1) that after a strong 2008, 1Q09 Cleantech investments have dropped and (2) the important role of Cleantech in the stimulus plans.
- The Cleantech Group released 1Q09 VC investments in Cleantech which show a 45% drop compared to the previous quarter and a 48% drop compared to 1Q08. The average round size dropped from $20M in 3Q08 to $12.3M in 1Q09. The report underlines that “Cleantech financing is moving into a new phase characterized by diversified funding sources as global recession and liquidity issues impact venture investors. Venture funds continue to invest significant sums, albeit at a slower pace and scale”. Utilities and corporations are increasingly playing a leadership role in developing the sector.
- Meanwhile governments globally are allocating historic amounts of capital to clean technology through stimulus packages. I should have added to my blog last week that the report “Towards a Green recovery” estimates that $400M of $2.6T spent in economic stimulus by G20 are earmarked for clean tech such as renewable energy, improved grids and cleaner cars. In the US, the American Recovery and Reinvestment Bill places Cleantech as a key driver of economic stabilization and job growth. The measures (Over 10% of the total spending) target doubling renewable energy generating capacity (wind, solar, and geothermal). Provisions also target efficiency, expanded electricity grids including advances metering, energy management SW and usage monitoring sensors.
The credit squeeze has challenged sectors such as wind and solar, stalling new and expansion projects. The industry is still looking for clarity on how a new Treasury grant program will work. Financing of projects slated to go forward is still taking extra time to get done. The stimulus has generated more activity if not yet money for the renewable s sector.