Clean Energy Projects Dodge the Global Credit Crunch

October 15, 2008

Under the ongoing global financial crisis, a lack of available credit is causing projects to be delayed or cancelled, but the clean energy sector is continuing to attract substantial amounts of investment capital. Ernst & Young noted in early October that the global "clean technology" market is expected to garner 11% of global venture capital investment in 2008, up from only 1.6% in 2003. And while the clean technology market attracted $3 billion in investments in 2007, it attracted $2.2 billion in just the first half of 2008. Over that 18-month period, the United States accounted for the majority of the venture capital investments, raising a total of $4.1 billion. According to Ernst & Young, there are 549 global clean technology companies supported with $8.9 billion of venture capital, and the United States has 301 of them, representing $7.29 billion in investments. In the United States, the clean technology sector is dominated by solar energy and biofuel companies. See the Ernst & Young press release.

According to Greentech Media, Inc., the venture capital boom for clean energy continued to grow in the third quarter of 2008. Greentech Media's figures roughly agree with Ernst & Young for the first half of the year, with an estimated $2.3 billion in venture capital investments, but Greentech Media's figures for the third quarter show a record investment of $2.8 billion. The company notes that most of the investments ($1.5 billion) went toward solar energy, with innovative thin-film solar firms such as SoloPower and AVA Solar receiving more than $100 million each in venture capital. Other technologies that attracted high amounts of venture capital include energy efficiency, smart grids, geothermal energy, automotive technologies, biofuels, and wind power. See the Greentech Media press release (PDF 121 KB). Download Adobe Reader.

Given the amount of investment taking place, it makes sense that the American Council on Renewable Energy maintains a directory of financing sources for renewable energy and energy efficiency companies and projects in the United States. The Renewable Energy Finance and Investment Network (REFIN) is a listing of both financing sources and professional experts, including venture capital firms, commercial banks, private equity firms, government agencies, and foundations, as well as law and consultant firms. First released in 2004, the REFIN directory will be updated this month and quarterly thereafter. See the REFIN directory.