Investment in renewable energy

In 2000, venture capital (VC) investment in renewable energy was about 1% of total VC investment. In 2007 that figure was closer to 10%, with solar power alone making up about 3% of the entire Venture Capital asset class of ~$33B. More than 60 start-ups have been funded byVCs in the last three years [http://www.greentechmedia.com/assets/pdfs/executivesummaries/VC-Investment-in-Solar-Update-Executive-Summary.pdf] .

Venture capital and private equity investments in renewable energy companies increased by 167 percent in 2006, according to investment analysts at New Energy Finance Limited [ [http://www.eere.energy.gov/news/news_detail.cfm/news_id=10528 EERE News: Clean Energy Investments More Than Double in 2006 ] ] .

These clean energy investments increased from $2.7 billion in 2005 to $7.1 billion in 2006, driven mainly by a 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.

New investment into the sector jumped US$148 billion in 2007, up 60 per cent over 2006, noted a report by the Sustainable Energy Finance Initiative (SEFI). Wind energy attracted one-third of the new capital and solar one-fifth. But interest in solar is growing rapidly on the back of major technological advances which saw solar investment increase 254 per cent [http://www.financialstandard.com.au/news/view/23561/ Financial Standard - Energy investments surge ] ] .

The IEA predicts US$20 trillion will be invested into alternative energy projects over the next 22 years .

See also

*Clean Technology Fund
*Green-collar worker
*Renewable energy development

References

External links

* [http://www.energy-base.org Basel Agency for Sustainable Energy (BASE)] .


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