As Oil Prices Take Off, VC Investments in Solar Zoom 133% in a Single Year

It’s good times for the clean energy technology sector. Expect them to get better -- especially if high fossil fuel prices stick.
That’s the conclusion of a new report by PricewaterhouseCoopers, aptly titled: Cleantech Comes of Age.
The rundown: In 2007, venture capitalists poured $2.2 billion into cleantech start-ups -- a 45 percent jump from '06 and far more than expected.
Solar stole the show.
The sub-sector raked in a total of $600 million in investments in 39 deals -- a 133 percent leap over last year. And solar installations rose too, by 120 percent.
Wind had a solid year. VC investment grew to $115 million in nine deals. That’s up from $10 million and three deals in '06. And wind turbine installations grew 45 percent.
Installation and production of biofuels (considered by most to be "alternative" energy, not clean energy) rose 32 percent. That’s a notable drop over last year and more proof that America may be losing its appetite for turning corn into motor fuel.
Check out Earth2Tech’s clever Biofuels Deathwatch map to follow the story. And who knows, actual clean energy may end up luring the capital that the biofuels sector keeps shedding.
PricewaterhouseCooper pegged the clean tech sector’s rise to the leap in oil prices. Have a look at the chart below, courtesy of PricewaterhouseCooper, via VentureBeat.

The trend is clear: When barrel prices have jumped so has VC investment in cleaner sources.
But don’t be fooled. The surge in cleantech isn’t solely dependent on high energy prices.
At least that's what Tracy Lefteroff, a global managing partner at PricewaterhouseCoopers, contends:
The increased venture capital investment into the Cleantech sector can be directly associated with the growing concerns about the environment, energy costs and security.
And the sector isn’t going anywhere soon, he says:
Despite signs of a weakening economy, the high investment level and intensified adoption rate of technologies in this sector validates the expected growth predicted by industry experts.
Still, every party needs a pooper. Here's CNET’s Green Tech blog on the study:
Although venture capital-backed companies can generate a lot of excitement and buzz, the amount of money that goes into start-ups is very small compared with corporate labs.
It sees companies like Shell, BP, Dow and General Electric -- and of course the US government -- as being the main drivers in the push to make clean energy prices competitive with fossil fuels.
Fair point, and largely true.
But hold up. The cleantech sector has managed to snatch up some of the most accomplished individuals from the dotcom world -- all of whom are aiming to chance upon the Google of cleantech.
Have a look at Earth2Tech’s list of the top 25 who made the switch.
And speaking of 25, that’s how many US states now require utilities to power up with renewables, with a national price on carbon on the way.
That's creating a huge demand for rapid cleantech innovation in America. And venture capital-backed companies seem a safe bet for helping us meet that demand, no?
They've changed the world before. Why not now, in cleantech?











Post new comment