While fossil fuel prices continue to rise, so have venture capital investments in greentech. Second-quarter figures released Tuesday by the Cleantech Group found that VCs have invested a record quarter high of $2 billion in 96 companies.

The findings include investments in North America, Europe, China and India.

The fundings grew 58 percent from the same quarter last year and 48 percent over the first quarter of 2008. Concentrating solar-thermal deals and money for biofuels that used non-food sources for a feedstock boosted the investments.

Concentrating solar-thermal power systems use different types of mirror configurations to concentrate the sun’s heat, collect it and convert it into electricity with the aid of a generator.

Concentrating solar thermal companies eSolar, BrightSource Energy, SkyFuel, Infinia and Sopogy raised a total of $278 million in venture capital for the second quarter of 2008, according to the Cleantech Group.

Solar thermal systems could potentially be cost-competitive with conventional power plants, but the cost – and risk – of building commercial plants has proven challenging so far.

Still, the technology has been gaining traction, as highlighted by the amount of funding solar-thermal companies brought in during the quarter.

Investors also remain bullish about biofuels, though not the kind that use food, such as corn, as feedstock.

Companies such as Range Fuels and EdeniQ, which make cellulosic ethanol, helped bring in $280 million in venture investments for the quarter.

Cellulosic ethanol is made from nonfood biomass like switchgrass, wood chips and corncobs.

Biofuel investments also went to companies like Sapphire Energy and GreenFuel Technologies, which make biofuel from algae.

Algae's oily properties help make the aquatic plants an alluring feedstock for biofuels. But challenges, such as the difficulty of growing large quantities of algae at an affordable cost, have kept companies from commercializing the slime. Despite the challenges, Cleantech Group researchers said algal fuel companies are attracting more money.

"For the first time, algae companies are attracting large, follow-on investment rounds," said Brian Fan, senior director of research for the Cleantech Group, in a statement. Fan also said he expects the trend to continue into the second half of the year.

Cleantech Group’s research also broke down investments by geography. U.S. companies grabbed a record $1.49 billion in 54 financing rounds, accounting for about 74 percent of the total.

California companies received 40 percent of the cleantech investments, with a record $794 million in 21 deals.

Chinese companies also brought in a hefty $235 million in venture capital, accounting for about 12 percent of the total.

China is a growing market for cleantech, the market research firm said. Chinese investors raised more than $6.9 billion for cleantech-related funds during the quarter.

Of course the Cleantech Group isn't the only one tracking the amount of venture capital dollars pouring into green technology.

Later this month PricewaterhouseCoopers and National Venture Capital Association are expected to release a joint report on venture capital deals made in cleantech during the second quarter.