U.S. venture capital (VC) investment in cleantech companies reached $4.9 billion in 2011 – flat in terms of deals and down 4.5% in terms of capital invested compared to 2010, according to an Ernst & Young LLP analysis based on data from Dow Jones VentureSource.
However, this represents a 29% increase from the $3.8 billion raised in 2009. In Q4 2011, VC investment in cleantech reached $940.5 million, with 70 rounds of financing.
‘Cleantech is still in the early stages of a long-term journey,’ notes Jay Spencer, Ernst & Young LLP's cleantech director for the Americas. ‘We've reached a point where new products and services are ready to be launched, and as these products come to market, we're seeing renewed interest, innovation and opportunity in cleantech.’
The energy/electricity generation segment led investment in 2011, with $1.5 billion raised through a total of 71 rounds, representing a 5% decrease in dollars invested from 2010. The solar subsegment received the lion's share of capital in Q4 2011, with $284.5 million, accounting for 91% of the sector's total investment of $312.9 million.
The products and services segment completed 2011 with the second-largest amount raised, at $1.0 billion – down 34% from 2010. In Q4 2011, the segment raised $256.2 million, with strong support from the transportation subsegment, which raised $203.2 million, or 79% of the Q4 2011 total – a 36% increase from the amount raised in Q4 2010.
In Q4 2011, the U.S. recorded 39 new-build clean energy asset financings, with a total deal value of $1.8 billion, according to Bloomberg New Energy Finance. New-build asset financing in 2011 totaled $23.2 billion in 234 deals, of which the $2.5 billion financing of the 855 MW NRG Energy Project Amp PV plant was the largest.
Corporate activity was especially focused in two areas: wind and solar. In the solar market, Google Inc. and Kohlberg Kravis Roberts & Co. invested $189.0 million in four California solar farms with a combined capacity of 88 MW.
California led U.S. cleantech investment in 2011, with $2.8 billion raised. In Q4 2011 alone, California garnered 67% of all dollars, with $629.5 million through 26 deals. Massachusetts raised the second-highest level of annual investments, with $465.1 million – a 63% increase from last year – and Colorado had investments of $363.3 million throughout 2011 – a 28% increase from 2010, making it the state with the third-highest level of investments.