Ucilia Wang, reporting for Forbes, looks at the trends of green technology development investment from 2012 and gives us predictions about where those investments might be during the new year.
Venture capital investments totaled $6.45 billion worldwide last year, down 33% from 2011. Solar deals accounted for only 11.8% of the investments in 2012, compared with 60% in 2011. It’s not surprising to see this big change in investor attitude. The 2011 bankruptcy of Solyndra, which had raised over $1 billion in private capital, highlighted the reality that solar investments over the previous half a dozen years had yet to make money for many investors. Plus, the big imbalance of supply and demand for solar panels over the past two years prompted factory closures and bankruptcies, and many more manufacturers are sure to disappear over the next three years.
Biofuel and green chemical companies drew 14.8% of the investments in 2012, while transportation took in 14.4% and energy efficiency accounted for 14.1%. Most of the sectors tracked by the Cleantech Group saw fewer deals in 2012 than in 2011. Only three sectors saw an increase in the deal count: biofuel, water/wastewater and agriculture/forestry. Investors are warming up to technology that promises to produce healthier crop efficiently and promote local consumption, given the challenge of managing the existing land, water and other resources to feed a growing population worldwide.
The CEO of Cleantech Group, Sheeraz Haji, explained which areas that green technology would grow in 2013 and why they would be so appealing to investors.
- Water: The price of water is set to go up. Businesses are paying more attention to whether they us water efficiently and how much they pay for: T it.
- Clean web: Software and data analysis — coupled with the use of mobile apps — will nurture new ways to manage resources, from electricity to transportation. Renting out cars and homes falls in this category. Haji called out Streetline, a startupwhose sensors and software help drivers find parking spots.
- Oil gas: Yes, the fossil fuel industry isn’t going away soon, and it’s keenly interested in managing its operations, such as its water and electricity consumption, more efficiently. In fact, some solar technology companies are finding customers in oil companies that need cheaper steam for get more oil out of their wells.
- Waste-to-energy: Turning garbage or agricultural wastes into products such as electricity, transportation fuels and industrial sugar (for making plastic), already has attracted a good amount of venture capital. Trash collection giant Waste Management has invested in many companies in this space.
- Agriculture and food: Using technology to improve farming is getting a lot of investor interest partly because of the growing, worldwide demand for food and because crop production hasn’t been a fertile ground for tech innovation. Using sensors to check soil and nutrient levels and software to analyze those data are examples of how technology could help.