NSI News

Spending down, interest in energy efficiency way up

Whether a piece of news gets labeled “good” or “bad” always depends on the perspective.

A recent case in point:

The New York Times Green Inc. blog reported recently that venture capital investments in clean tech companies plunged by 50 percent to $2.6 billion last year as investors put their money in energy efficiency projects instead. The information came from a report released last month by Ernst & Young. The downturn was due to investors shifting money from capital-intensive solar and biofuel companies into firms that use technology to reduce or monitor energy use because the funding requirements are lower and the returns are often faster.

But the report, based on data from Dow Jones VentureSource, also found that while the overall monetary investment fell, the number of deals increased 21 percent. In addition, the Energy Efficiency category received the most US Venture Capital investment dollars in the fourth quarter of 2009, with $252.8 million and 22 deals, compared to $133.7 million and 14 deals in the third quarter. This category raised $593.3 million for all of 2009.

Clearly, the fine print is important here. It’s basically great news for any company that has anything to do with energy efficiency, as well as for anyone in the public or private sector who does business with them.

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For more information, please contact Heather Sabharwal at hsabharwal@kglobal.com or 202-349-7016.