Cleantech investment booms, but energy tech bubble looms
April 30, 2007

Investors are pouring money into clean technology, with spending on R&D rising to $48 billion in 2006, up 9 percent from 2005, reports a new study by Lux Research, an emerging technology research and advisory firm. However, the report warns that the energy technology sector is showing signs of a bubble, with initial public offering (IPO) values and venture capital deployments more than doubling last year.

"Cleantech encompasses innovative technologies specifically designed to optimize the use of natural resources and reduce environmental impact, with five top-level segments: energy, air, water, waste, and sustainability," said Lux Research President Matthew M. Nordan. "Driven by solar and biofuel deals, the energy segment looks overheated — there's no way that more than a fraction of the 930 energy start-ups operating worldwide can possibly succeed. But the attention to energy masks neglected opportunity in other segments: For example, the waste segment accounted for 32 percent of merger and acquisition value last year but only 1 percent of IPO value and 4 percent of venture capital."

The 600-page report shows that in the energy segment, IPO value rose from $1.6 billion in 2005 to $4.1 billion in 2006 and venture capital raised went from $623 million to $1.5 billion, primarily for solar and biofuel deals. It says that there are now 930 energy start-ups operating worldwide, 198 of which are venture-funded.

The report notes that media interest in cleantech, as measured by the number of articles in major print media, has risen by 70 percent since last year, while 29,874 scientific journal articles were published on cleantech topics in 2006.

Some 4,093 U.S. patents focused on cleantech were issued in 2006. Lux Research reports that "U.S. cleantech patents issued have grown at an average of 5 percent per year since 1995, double the rate for patents overall."

More information on the Cleantech Report is available at

Related articles

Balloon technology could cut cost of solar energy 90 percent by 2010. With high energy prices and mounting concerns over human-induced climate change, there is intense interest in renewable energy, especially solar, which produces no pollution and is readily available in the form of sunlight. In recent years, however, the solar-energy market has been hampered by supply shortages of refined silicon, the critical resource needed for solar-cell fabrication. Further, because solar installations traditionally require a large surface area to capture as much sunlight as possible, solar arrays often take up real estate, occupying land used agricultural production and other purposes. Without government subsidies, solar is not presently viable in many areas.

Venture Capitalists, China and Green Technology. A Bay Area venture capitalist with a storied past, has set his sights on "green technology" and ultimately China, after some compelling remarks from state representatives at a recent conference. Early this spring, Chinese officials named solar and clean coal technologies as two of their three pre-eminent priorities for investment and development in the near future. For a country with burgeoning energy needs surpassing what power is presently available, this is both realistic and positive news for environmentalists and economists alike. Hoping to capitalize, John Doerr and his associates are now funneling cash into the emergent green technology sector, which he, and an increasing number of other investors believe to be the next big thing.

High oil prices fuel bioenergy push. High oil prices and growing concerns over climate change are driving investment and innovation in the biofuels sector as countries and industry increasingly look towards renewable bioenergy to replace fossil fuels. Bill Gates, the world's richest man, has recently invested $84 million in an American ethanol company, while global energy gluttons ranging from the United States to China are setting long-term targets for the switch to such fuels potentially offering a secure domestic source of renewable energy and fewer environmental headaches.

Bacteria can generate renewable energy from pollution, help fight global warming. Currently, most energy production generates carbon dioxide, a potent greenhouse gas that contributes to global warming and local pollution. At the same time that carbon dioxide concentrations are rising in the atmosphere, fueling higher temperatures, burgeoning population growth of humans and livestock is producing ever-increasing amounts of organic pollution and waste. Now researchers at the Center for Biotechnology at the Biodesign Institute of Arizona State University are working on a way to solve both problems using bacteria to convert organic wastes into a source of electricity. .


News options Liquid error: Template not found languages/english/includes/x/_54.liquid

CITATION: (April 30, 2007).

Cleantech investment booms, but energy tech bubble looms.