The first financial quarter of 2011 closed last week, and the early numbers suggest it was a record quarter for cleantech investment.
Preliminary tallies show more than US$2.5 billion was invested in the global cleantech sector in 1Q11. This represents the strongest first quarter on record for cleantech -- besting last year's previous high of US$1.97 billion. In recent months, some data providers have warned of a bleak future for cleantech investment, citing a reduction in the number of investments being completed in the sector as well as difficulties by investors in raising money.
Dallas Kachan, managing partner of the cleantech research and advisory firm Kachan & Co., says these numbers tell a different story. "Cleantech investment on aggregate is very much alive and well. There are a record number of deals being done globally, for near-record proceeds."
According to Kachan, the major global trends driving clean energy technology development and investment are resource scarcity, desires for energy independence, and, to a lesser extent, climate change.
Alongside venture capital firms and institutional investors, multinational corporations are emerging as major players in clean technology financing.
Kachan highlights that over the next 15 months Jpanaese companies including Sharp, Toshiba, and Panasonic have committed to invest US$4.5 billion in clean technologies. South Korean companies like Samsung and LG have made similar pledges. Kachan states the time is ripe for these corporations to get involved: "With the largest companies worldwide sitting on trillions in cash, the climate is right for increased corporate multinational M&A, investment in and purchases from cleantech companies."
Kachan & Co. sees corporations as the source of cleantech funding to watch most closely in the future. The firm expects corporate capital to outstrip the US$7.68 billion invested last year by venture capitalists very soon.
It is not much of a surprise, therefore, that one of fastest growing cleantech sectors for investment, energy efficiency, is also the number one place for corporate funding. Energy efficiency has long been considered the most practical way to reduce energy consumption and carbon emissions. Kachan says corporations are investing heavily in energy saving technologies because the technology is proven and offers faster returns on investment.
Image credit: Andrew Magill via Flickr
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