David Kirkpatrick

September 9, 2008

Venture capitalists putting money into green technologies

Cleantech companies saw VC investment grow by by 41% to over $960 million during Q2 2008.

From the link (the initial quote is from, Joseph Muscat, Ernst & Young’s Americas director of cleantech and venture capital.):

“I think what you’re seeing is sort of pent-up investments now in R&D,” he said of the company’s research, based on based on data from Dow Jones VentureSource.

Cleantech subsectors include alternative fuels, energy and electricity generation, energy storage, water, environment, industry-focused products and services and energy efficiency.

Clean Edge, an environmental research firm, said revenue in solar photovoltaics, wind, biofuels and fuel cells jumped 40 percent to $77.3 billion in 2007. The firm projects these four benchmark technologies will grow to $254.5 billion within a decade.

A February report from the McKinsey Global Institute said an additional annual investment of $170 billion between now and 2020 could not only cut greenhouse gas emissions in half, but also provide investors with an internal rate of return of about 17 percent.

New avenues to invest in such technology could help boost investments.

Firsthand Funds created its Firsthand Alternative Energy Fund in October to give regular investors interested in alternative energy a place to invest their money, said Kevin Landis, who manages the new energy fund.

“We see kind of a gap in there in that there’s lots of venture capital funds out there but there’s not many mutual funds for people like you and me to put money to work in this,” he said.

It’s not all photovoltaics, wind or biofuels that are attracting investments either, Landis said.

Building automation, advanced lighting and improved insulation are “the here and now technology,” he said.