Cleantech investments down 44 percent in Q2 2011

U.S. venture capital (VC) investment in cleantech companies fell by 44 percent to $1.1 billion in Q2 2011 compared to Q2 2010, according to Ernst & Young LLP. The analysis was based on data from Dow Jones VentureSource. Around $1.9 billion was invested in Q2 2010.

The Energy/Electricity Generation segment raised $311.6 million during Q2 2011. Through the first half of the year it raised $686.9 million. For the same period in 2010, it raised just under $700.6 million. Companies with a focus on solar power generation had the highest share of investments during the quarter, $234.2 million or 21 percent of the overall investment in 2Q 2011. BrightSource Energy secured the largest investment of the quarter with $168 million.

Companies in the Energy Storage sector brought in $150.3 million, a 4 percent drop from Q2 2010. The Ernst & Young report said cleantech companies in the revenue generation stage of development drew the greatest amount of VC investment in the first half of the year with $1.44 billion. Later-stage companies raised $1.28 billion in the first half of 2011.

California-based companies accounted for 51 percent of the dollars raised with $548.8 million. However, the Mountain region experienced a 167 percent increase in investment from Q2 2010 to $114.7 million. The Northeast followed with $109.8 million in investments.

In mid-June, the U.S. Department of Energy announced loans and guarantees or offered conditional loan guarantees totaling more than $32 billion to support 32 clean-energy projects. That included more than $10 billion in loan guarantees for solar projects. First Solar secured $4.5 billion in loan guarantees, NextEra Energy Resources LLC secured $681.6 million and Abengoa SA's solar energy unit received $1.2 billion. All of the money is earmarked for projects in California.

On the private investor side, a group of 11 wealthy U.S. families formed The Cleantech Syndicate, an investment fund to support renewable energy and power-efficiency companies at all stages of development. The families intend to invest up to $1.4 billion over five years, according to Bloomberg New Energy Finance.

Corporate activity was notable in two areas: solar and electric vehicles. In the solar market, Google announced a partnership with SolarCity to create a $280 million fund to provide solar panel leases and power purchase agreements to households. Bank of America, Merrill Lynch, Prologis and NRG Energy are jointly financing the installation of $2.6 billion of commercial and industrial rooftop solar arrays.

Additionally, GE announced a $600 million investment to manufacture solar panels in a factory slated to be the largest in the U.S. In terms of electric vehicles (EV), several initiatives focused on EV charging infrastructure. The National Renewable Energy Laboratory (NREL) is working with Google, Coulomb Technologies, Pacific Gas and Electric, Tom Tom and Best Buy to provide information on the locations of EV charging stations. GE Energy Industrial Solutions and Lowes will partner to offer Level 2 GE WattStation Wall Mount EV Charging Stations.

In terms of other capital market activity, there were nine cleantech mergers and acquisitions with a disclosed value of $2.1 billion in Q2 2011, according to IHS Herold. The largest of these was the 60 percent acquisition of SunPower Corp by Total SA, for $2 billion.

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