cleantech

Why Clean Energy Investment by PE is Declining

by

January 18, 2013

Despite ongoing innovation, such as Alstom’s recently marketed ECO 100 wind turbine that can power 2000 homes shown here, the appeal of clean energy investments has declined in the past two years. The PE and VC contribution to overall investment is currently running at USD 5.8 billion for solar, biofuel, wind and smart-grid startups worldwide last year, according to data from Bloomberg New Energy Finance (BNEF). In a fairly lengthy feature on news of declining clean energy investments, Bloomberg cited recent BNEF data and described the current state of the market for PE investors.

Here is a quick summary of the text.

  • Investment activity declined for the second year in a row, since peaking in 2010
  • Losses due to changes in the investment case for solar cell production is one reason
  • VCs are looking for the next hot spot as wind, solar, and light emitting diode (LED) deals lose their appeal
  • Cutbacks in government subsidizing of renewable energy is a factor, as is the fact that
  • Fewer entrepreneurs are seeking capital
  • Difficulty with exits is another, but it is not all bad news as
  • Industrial investors, such as Shell, continue to pump money into startups through corporate venturing activities, and
  • Warren Buffett’s holding company invested in solar plants in California (Image source: Alstom)
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