Silicon Valley Watcher - Former FT journalist Tom Foremski reporting from the intersection of technology and media

2.6.07: Cleantech investments skyrocket to $7 billion worldwide

Posted by Richard Koman - February 6, 2007

Investment in cleantech companies surged in 2006 from $2.7 billion to $7.1 billion, a 167% jump, reports GreenBiz.com.

Investment in biofuels increased more than four times, from $647 million in 2005 to $2.8 billion in 2006. Averge deal size seems to be increasing, as the number of deals only increased 31% to 354.

Investment in solar was up 210%, from $451m to $1.4bn, driven by initiatives such as California's 'Million Solar Roofs' and attempts to overcome the shortage of silicon both by building more capacity and through investment in technologies that use less silicon.

Wind investment more than doubled from $307m to $821m, but most of the investment in the sector is directed towards asset finance because the technology is relatively mature and the business model is proven.

Other low carbon technologies, including energy efficiency, smart distribution, carbon markets, fuel cells and hydrogen grew by 74% from $979m to $1.7bn but individually each sector remains relatively small.

First round venture capital raising increased from $217m to $339m, suggesting that the search for technological solutions still has some way to go. Second round financings actually dropped but a big jump in third rounds, from $261m to $675m, signifies that many technologies are coming of age.

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