Global cleantech investing slides in Q1

Global investments in the cleantech sector dropped significantly in the first quarter of this year, down nearly 50 percent over the same period a year ago, according to The Cleantech Group and Deloitte.

Preliminary results show that 82 firms across North America, Europe, China and India invested some $1 billion (US) in cleantech in Q1 — 48 percent less than in the first quarter of 2008. The average round of financing has also declined, from $20 million in the third quarter of last year to $12.3 million in the first quarter of 2009.

“Cleantech financing is moving into a new phase, characterized by diversified funding sources, as the global recession and liquidity issues impact venture investors,” said Brian Fan, senior director of research for The Cleantech Group. “Venture funds continue to invest significant sums, albeit at a slower pace and smaller scale than in the past two years.”

The top money-getters in the first quarter of this year were ventures in solar energy ($346 million), biofuels ($96 million), advanced batteries ($94 million) and electric vehicles ($78 million).

North American firms saw the bulk of investment — 68 percent — while Europe and Israel combined nabbed 28 percent of the quarter’s cleantech financing.

The analysis also notes that utility companies and corporations are also playing an increasingly large role in cleantech funding.

“Governments are not the only significant new investors in cleantech,” said Scott Smith, leader of cleantech for Deloitte. “Utilities are also stepping up to fill the funding void and making equity investments in companies. Investment plans range from building and operating solar and wind systems to financing third-party, shovel-ready projects. These moves underscore cleantech’s emergence as a significant and maturing market that will remain highly relevant — both during and following the economic downturn.”