Clean-tech investors favoured energy efficiency in 2009

London, 7 January: Clean technology investors ploughed money into the energy efficiency, transportation and power storage sectors in 2009, at the expense of more traditional renewable energy technologies such as solar and wind, according to end-of-year reports from two analysis firms.

Venture capital (VC) investment in energy efficiency and low-carbon transportation (including electric vehicles, advanced batteries and fuel cells) reached record levels in 2009, according to preliminary figures from the Cleantech Group and Deloitte, attracting $1.1 billion and $1.0 billion respectively.

This was only a shade behind investment in the solar sector, which at $1.2 billion was 64% down from 2008. There was only one ‘mega deal’ in solar last year – the $198 million raised by Californian manufacturer Solyndra – compared with 13 in 2008, said Dallas Kachan, managing director of the Cleantech Group. This was because investors moved money to sectors less capital-intensive than solar, he said.

“Solar facilities might not be the best place for the investors’ money,” he said, noting that VC investment was being drawn back to its more usual role of supporting development of new technologies.

Despite total VC clean-tech investment being down 33% from 2008 to $5.6 billion, Kachan said “2009 will go down as a pretty good year”, with preliminary figures showing 557 deals completed – close to the record of 567 in 2008. Clean-tech fared much better than other VC sectors, he added.

Meanwhile, shares in energy efficiency and power storage companies gained strongly in 2009, while those in solar, wind and biofuel companies “found the going tougher”, said New Energy Finance (NEF), which provides research for the WilderHill New Energy Global Innovation Index that tracks the performance of 86 global clean energy stocks.

The nine power storage stocks in the index climbed 120% over the year and the 17 energy efficiency stocks gained 48%. The 25 solar energy stocks collectively grew 30%, but also accounted for the index’s five worst performers. Wind energy stocks, of which there are 18 in the index, gained 36%.

US-based thin film solar firm Energy Conversion Devices and German solar manufacturer Q-Cells led the poorest performers, with respective falls of 58.1% and 54.3%.

Among the best performers were Hong Kong-listed electric car and battery maker BYD, soaring 439%, and Taiwanese LED maker Epistar, up 315%.

Overall, the index rose 39.7% in 2009, finishing the year at 248.68, nearly doubling a low of 132.03 on 9 March 2009 but still a long way off its record high of 468.75 in November 2007.

Michael Liebreich, chairman and CEO of NEF, said: “The spectacular out-performance by firms involved in batteries, electric cars and parts of the energy efficiency business shows that investors caught hold of new themes last year – particularly the potential of advanced vehicle technologies and the smart grid.”