Solar VC funding wanes in 1Q 2010

Having been the major beneficiary of venture capital investments over recent years, solar funding could be on the wane if the fall in funding for the first quarter of 2010 develops into a trend going forward. According to the latest findings issued by the Cleantech Group and Deloitte, transportation topped the category list for the first time with US$704 million invested in 27 deals. The solar sector only attracted US$322 million in 27 deals. Clean technology in general attracted VC investments totalling US$1.9 billion across 180 companies in the first quarter of 2010.

In 2009, VC investments in solar reached US$1.2 billion, 21% of all funding, however transportation (including electric vehicles, advanced batteries, fuel cells) was close behind with US$1.1 billion in funding.

"The bounce back in venture investment from lows in early 2009 has continued, with the first three months of 2010 representing the strongest start to a year we have ever recorded," said Sheeraz Haji, President of Cleantech Group. "Key to the growth has been increasing interest in a broader range of cleantech themes, such as smart mobility and resource efficiency, which are now taking over from the historically dominant renewable energy sector."

On a regional basis, North America accounted for 81% of total investments in the quarter, a three-year high for the region, according to the report. Europe and Israel accounted for 14%, China for 4%, and India 1%.

In the solar sector investments of note in the quarter included, SpectraWatt, which raised US$41.4 million, Petra Solar raising US$40 million and Enphase Energy, which raised US$40 million.

Cleantech venture investment was up 29% from the previous quarter and up 83% from the same period a year ago. The number of deals recorded in the quarter was a new record, slightly higher than the previous record of 165 deals achieved in the fourth quarter of 2009.