We've passed the peaks of recent ethanol, European wind and solar thin film investing, says the Cleantech Group.
New investment figures from the Cleantech Group have "called peaks" in investment into conventional ethanol, European wind and solar thin film sectors.
The company's latest cleantech investment data, released today, asserts that a wave in U.S. ethanol and European wind energy investment that had built since 2005 actually peaked in 3Q06 at $1.52 billion, and has steadily declined since.
Further, driven by investments in U.S. and European companies, a thin-film solar investment wave in 2007 peaked in 3Q07 at $1.83 billion invested, and has since contracted for two consecutive quarters, to $1.56 billion 4Q07 and $1.25 billion in 1Q08, the company said.
Thin-film technologies apparently accounted for approximately two-thirds of investments in solar, while crystalline technologies accounted for another third.
The assertions come in the company's latest quarterly investment data tracking investment up to, and including, 1Q2008. The data paints a picture of declining cleantech investment in the last two sequential quarters.
First-generation ethanol largely drove the peak in 3Q06, and thin film solar the peak in 3Q07, says the Cleantech Group. Investment in both sectors is now in decline, according to the company.
“While the long-term investment trend shows continued expansion of the category as a whole, we are seeing contraction in what had been the market-leading sectors of first generation biofuels and second generation solar,” said John Balbach, Managing Partner, Cleantech Group.
The company also pointed to possible seasonality factors contributing to valleys between the peaks, citing the effect particularly in Northern California and Canada.
Yet while down sequentially, the company's first quarter 2008 numbers for cleantech investment in North America, Europe and Israel totaled $1.25 billion, up 42 percent from the same period a year ago.
That's cause for what the company's announcement called “tempered optimism.” Because issues of cycles and seasonality aside, Balbach noted the industry is still only scratching the surface of technology innovation actually required.
“Just like the industrial revolution encompassed successive waves (including agriculture, manufacturing, and transportation) over several decades, the cleantech revolution will see similar waves of innovation over several decades.”
For instance, the peak and subsequent fall-off in conventional ethanol investments did not wholly include, nor strictly apply, to cellulosic ethanol.
“Unlike first generation biofuels, which were based largely on existing science and technology, cellulosic approaches require breakthroughs in key areas that have yet to be achieved,” said Balbach.
“Whether cellulosic will see a similar wave to conventional ethanol depends on whether a critical mass of cellulosic startups reach a level of maturity and scalability at roughly the same time.”
Significant 1Q08 cellulosic deals included a new $100 million round for Range Fuels of Colorado, just as the quarter closed (see Smart tech for energy pulls in funding).
As to which sectors might represent the next waves of investment, Balbach noted energy still remains a key investment focus, pointing to next-generation biofuels, wind turbines or new solar technologies.
“There is a pressing need for infrastructure solutions, including transportation, water, agriculture, and the electrical grid.”
“We’re starting to see demand pick up for point solutions to specific sustainability challenges corporations are facing. Whether any of these coalesce into a wave is uncertain, but we don’t see any shortage of cleantech investing opportunities over the next few years.”
The Cleantech Group, formerly the Cleantech Venture Network, publishes data tracking the cleantech sector, runs the Cleantech Network investor's network, Cleantech Forum conferences worldwide and other business interests, including Cleantech.com.
print
delicious
digg
hugg
reprint
Post new comment