According to newly released data from Greentech Media’s Venture Power Report, venture capital investment in renewable energy reached an unprecedented level of more than a billion dollars in Q1 2008.  Investment insolarpower once again led the VC charge with more than $280M invested in 15 VC financing rounds. Also winning prodigious amounts of renewable energy funding was the biofuel sector with more than $200M and the energy efficiency/smart grid sector at $130M.  Venture firms continue to invest in new battery and fuel cell firms as well as new entrepreneurial efforts in LEDs and other lighting technologies.

"VC investment in renewable energy in Q1 is on pace to better last year’s record numbers.  Investors are optimistic and bullish on energy in the face of global climate and economic issues.  They are investing across the energy spectrum in power generation, alternative fuels, energy efficiency, and smart grid / demand response technologies,” said Eric Wesoff, senior analyst at Greentech Media.  He added, "Investors are looking for 2008-2010 to be the years of renewable energy exits."

Notable alternative energy VC funding rounds in Q1 included:

  • Range Fuels’ $100M+ round B for cellulosic ethanol development
  • Luminus Devices’ $72M Round E for LED lighting technology
  • Suniva’s $50M Round B for high efficiency solar cells
  • Boston Power’s $45M Round C and A123’s $20M from GE for Li-ion batteries

"With the desperate need to solve so many of the world’s energy problems, Renewable Energy continues to be a compelling investment area," said Ira Ehrenpreis, a General Partner at Technology Partners. He added, "These record figures from Venture Power bear out our investment thesis that there is great business in Cleantech."

"There was renewed interest and investment in Electric Vehicles, Wind Power, Tidal Power, and Green IT.  Every energy sector is being scrutinized by VC investors for opportunity.”  Wesoff added, "We see these investment numbers staying steady through 2009 as investors continue to nurture their current portfolios and look for new opportunities."

Other Trends:

  • Energy efficiency has finally come into its’ own as an investment sector with dedicated energy investors and generalist VCs focused on consumer and industrial energy efficiency
  • Tidal energy and wind energy, once anathema to VCs is now a viable if regional VC investment
  • Solar investment is still hot but thin film solar is not receiving the same magnitude of investment as it did in 2006 and 2007.

More information about the Venture Power Report an be found at: http://www.greentechmedia.com/research-venture-power.html