U.S. Department of Energy - Energy Efficiency and Renewable Energy
EERE Financial Opportunities
Clean Energy Investments More Than Double in 2006
January 24, 2007
Venture capital and private equity investments in clean energy
companies increased by 167 percent in 2006, according to investment
analysts at New Energy Finance Limited. These clean energy investments
increased from $2.7 billion in 2005 to $7.1 billion in 2006, driven
mainly by a surge of investments in biofuels in the United States.
Investments in biofuels more than quadrupled, increasing from
$647 million in 2005 to $2.8 billion in 2006. In addition, investments
in solar energy more than tripled, while wind power investments more
than doubled. Investments in other clean energy technologies—including energy efficiency, fuel cells, hydrogen, smart power
distribution, and carbon markets—grew by 74 percent.
New Energy Finance notes a number of trends suggesting that the clean
energy field is maturing. For one thing, more than half of the venture
capital funding was third-round funding, also called "Series C"
funding, up from less than a third the year before. According to New
Energy Finance, such funding generally goes to proven technologies at
an advanced stage of commercialization. In addition, private equity
investments in new assets and capacity expansions for clean energy
companies more than tripled, to $3.5 billion. These investments
generally go toward proven technologies with a solid business plan.
Clean energy companies also raised $1.9 billion through over-the-counter transactions and by selling their stock at a discount, a
technique known as a "private investment in public equity," or PIPE.
These mechanisms are typically used for fast cash infusions to fund
expansions in small- to medium-sized public companies. See the New
Energy Finance press release (PDF 24 KB).
Download Adobe Reader.