BOSTON (TheStreet) -- The clean-tech industry, whose notable successes include First Solar (FSLR and American Superconductor (AMSC, received less than half the amount of venture funding in 2009 than a year earlier because companies take longer to bring to market.Before the banking crisis, U.S. clean-technology venture funding had been on a steady incline for seven years. But clean-tech funding dipped to $1.9 billion last year, compared with $4 billion in 2008 and $2.6 billion in 2007, according to the National Venture Capital Association. North America's share of cleantech venture capital dropped to 62% from 72% in one year, according to The Cleantech Group. "The economic downturn had a significant impact on all venture investments and particularly on clean tech," says Steve Gullans, a managing director at Excel Venture Management in Boston. "As energy prices dropped precipitously and funding disappeared, many clean technologies provided less attractive business models." Two standout investments last year were a $198 million round to thin-cell solar firm Solyndra and $100 million to battery maker A123 Systems ( AONE, which went public in September. A123 Systems, which is based in Boston, said this month it will supply battery packs for the $88,000 Fisker Karma plug-in electric car. Stock-market investors have been hot on clean-tech companies. The PowerShares Cleantech Portfolio ( PZD exchange traded fund rose to a 52-week high this month, doubling from the market low in March. That's twice the gain of the broader market represented by the S&P 500 Index. Venture funding was dismal in all industries in the wake of the credit crunch. U.S. venture capitalists invested $17.7 billion in fewer than 3,000 deals in 2009, the lowest level of dollar investments since 1997. There were double-digit percentage declines in almost every industry. As the recession wanes, venture capital investors have said in surveys that clean tech looks better this year than last.
Still, it will be tough for clean technology to bounce back to its pre-recession growth spurt, even as the Obama administration has dedicated time and money to the sector through the American Recovery and Reinvestment Act of 2009. Earlier this month, the president awarded $2.3 billion in tax credits to 183 companies involved in clean-energy projects. While the Department of Energy reports that the private sector may match this investment by as much as $5.4 billion, federal investment may not be enough to impress venture capital investors. Prospects are better for clean-tech startups looking to protect their intellectual property by securing a patent. Under normal circumstances, the U.S. Trademark and Patent Office processes patent applications in the order it receives them, regardless of whether the application is for a first-time inventor's nose-hair trimmer or for the Apple ( AAPL - Get Report) tablet. But through a new incentive program called the Green Technology Pilot Program, the office will move applications to the front of the processing queue if they pertain to environmental quality, energy conservation, development of renewable energy or greenhouse gas emission reduction. "With a quicker examination, entrepreneurs may be able to raise investor funding, introduce new technologies and increase the job force," says Jeffrey Schox, a patent attorney and founder of the Schox Patent Group in San Francisco. -- Reported by Carmen Nobel in Boston.