U.S. venture-capital (VC) investment in cleantech companies increased by 73% to $1.1 billion in the third quarter of this year (Q3'11) compared to the third quarter of last year (Q3'10), according to a new Ernst & Young LLP analysis based on data from Dow Jones VentureSource.
The report also found that the total number of deals also increased by 36% to 76. On a consecutive quarter basis, dollars invested in Q3'11 are 4% above the amount in Q2'11.Â Â Â Â Â
‘Confidence in cleantech investing continues despite the challenging investment market,’ says Jay Spencer, Ernst & Young LLP's Americas cleantech director. ‘We saw significant commitments in energy storage, which reflects a growing corporate focus on proactively managing their energy mix.’
The energy-storage segment led cleantech investment during Q3, raising $421 million -representing a 1,932% increase during the same period last year. This segment has raised a total of $865.2 million throughout 2011.
Cleantech companies in the revenue-generation stage of development led both deals and investments in Q3, with 49 deals and VC investment of $921.0 million – a 203% increase from Q3'10, according to the report. The share of revenue-generation stage companies accounted for 78% of the dollars invested – versus Q3'10, when this share accounted for 44% of the total dollars invested.Â
California continues to lead national cleantech investment this year, with $1,738.2 million raised to date. In Q3 alone, California garnered 52% of all dollars, with $583 million – a 74% increase from Q3'10. Massachusetts raised the second highest level of investments, with $170.4 million – a 65% increase from the same period last year.
Both Pennsylvania and Oregon saw investments more than triple since Q3'10, bringing their Q3'11 investment levels to $85.4 million and $73.5 million, respectively, Ernst & Young says.
‘The renewable energy capacity additions and corporate commitments demonstrate that cleantech has reached its deployment phase,’ Spencer notes.
The U.S. recorded 44 new-build clean energy asset financings with a disclosed value of $6.8 billion. The U.S. solar energy sector attracted the majority of all new-build asset financing raising $5.0 billion through 20 deals. Within the solar sector, NRG Energy secured the largest transaction, with a $1.2 billion loan guarantee from the U.S. Department of Energy and $350 million in equity for the development of the 250 MW High Plains Ranch II and III PV plants, which form the California Valley Solar Ranch.
Although there were no cleantech initial public offerings (IPOs) conducted this quarter, companies are continuing to enter the IPO pipeline. During Q3, there were 11 cleantech mergers and acquisitions with a disclosed value of $222.0 million, according to IHS Herold data cited in the report.
The largest of these transactions was the $131 million acquisition by MEMC and its subsidiary SunEdison of FRV, the U.S. subsidiary of privately held Spanish solar photovoltaic power developer Fotowatio Renewable Ventures.