That's the conclusion of New Energy Finance in a new analysis they released today. They studied 129 clean energy investments in Europe by 37 investors and found 15 IPOs, 10 trade sales, 21 up rounds, 19 down rounds or write-downs, and 10 liquidations. All told, they estimated a 54.9% gross annualized return across the portfolio of 129 companies. The study period covered 1998 to the present, and included an estimate of 1.2x valuation on unrealized gains on funds invested. It's a very positive study, certainly, and helps further illustrate why investors are so keen on this sector right now. It's also a very useful analysis -- but it's important to note a lot of caveats involved. The methodology is hard to figure out from the press release alone, but it's clear there's a lot of potential for some data bias (while it's impressive that 37 investors participated, it looks like the study only covered about half of relevant investments; and as well, it appears the study relies somewhat upon self-reported data from the investors). I'd also like to see more information about the way that "unrealized holdings, calculated on an industry-standard, conservative basis, are valued at 1.2 times the total funds invested." It's unclear, but in light of the statements that 35 exits have returned 1.4x the funds invested, and the total estimated gains are 2.6x (1.4x + 1.2x), it seems like there's an implication that the ~75% of funds invested that have NOT led to exits may be assumed to have seen some pretty nice paper gains. We may ask the good folks at NEF to write up their methodology for benefit of readers at some point... Before we all pat ourselves on the back about the healthy returns in this sector, in any case, consider the following:

• Neal has some cautionary words about solar...
• These researchers have some cautionary words about cellulosic ethanol...
• Here's a cautionary tale for anyone who's planning on generating a lot of value out of carbon offsets, and planning on today's carbon market pricing in their financial modeling...
• And here are some cautionary words about VCs stretching their investment approach to do quasi project finance (something we've discussed on this site a bit)

One funding announcement so far this week: Pentadyne has closed on a $14mm round of financing, led by Loudwater Investment Partners. GTM's Rachel Barron reports that the capital will go toward sales channel and product development. Jonathan Shieber at Dow Jones pointed out in CTI that the PR described it as a "recapitalization," and wondered about the company's previously-announced AIM IPO plans. It's unclear from the PR whether existing investors participated in the latest financing, which brought total investments in the company to about $60mm. Other news and notes: Cleantech is heating up in Australia, too... And finally, it's not cleantech, really, but how about $20mm to put a robot on the moon?

Extremely pleased [self-promotion alert] to share the announcement that Propel Biofuels has raised a $4.75mm Series A round (see Propel's pdf press release here), with funding provided by @Ventures and Nth Power. The investment round also included participation by several leading Seattle-area businesspeople, including Andrew Stout (founder of Full Circle Farms), Barry Barr (founder of KAVU), and Jack Rafn (founder of RAFN Construction). Also coming onto the board alongside Peter Mills of @Ventures and Nancy Floyd of Nth Power will be Arthur Rubinfeld, previously Exec VP at Starbucks, where he was responsible for building out the company from 100 locations to over 3,800 stores worldwide. There are around 200,000 gas stations across the United States, but only 750 biodiesel refueling stations and 1,200 E85 refueling stations. And most of these locations aren't convenient or accessible to most drivers. As automakers bring clean diesel autos and flex fuel vehicles to market, and as venture-backed biofuels producers ramp up their volumes, the ability of most Americans to easily find locations to fuel their cars with biofuels remains a huge bottleneck in the market's development. Propel's BDS Unit directly addresses these challenges, with a low-risk, no-upfront capital system for independent gas station owners, green-minded retailers and others who want to offer biofuel choices to their customers.