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 sub-segment 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 sub-segment, which raised $203.2 million, or 79% of the Q4 2011 total – a 36% increase from the amount raised in Q4 2010.
The energy-storage segment ranked third in terms of total amount invested in 2011, with $932.6 million through 28 deals, representing a 253% increase from 2010 in dollars invested and a 47% increase in number of deals. In Q4 2011, the segment raised $35.0 million, all of which can be attributed to the batteries sub-segment.
Companies in the energy-efficiency segment attracted $646.9 million in 2011 – a 29% decrease from 2010. The segment, however, led both the year and quarter in rounds of financing, with 78 deals and 21 deals, respectively. Q4 2011 investments in this segment were led by the energy-efficiency products sub-segment, with $57.5 million raised through 10 deals.
In addition, 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.
On the wind front, MidAmerican Energy bought 49% of the $1.8 billion 290 MW Agua Caliente project based in Yuma County, Ariz., which is being developed by NRG Energy. Duke Energy Corp. and American Transmission Co. bought a transmission project to bring wind energy from Wyoming to the U.S. Southwest, and MidAmerican Energy acquired three Iowa wind power projects with a combined capacity of 404.8 MW.
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.
Also notable was that Vestas is teaming with IBM to improve the return on wind power investment by using the IBM BigInsights analytics software and an IBM Firestorm supercomputer to increase energy output.
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.