Investors loved the wind energy sector, and they showed it by blowing the most investment dollars that way in 2010. They also were most busy with energy efficiency deals, the number of which surpassed other cleantech categories last year, according to a U.S. market report by Peachtree Capital Advisors.
By Ucilia Wang, GigaOMInvestors loved the opportunities of the wind and solar sectors and the quick returns of energy-efficiency firms in 2010, according to a U.S. market report (PDF) by Peachtree Capital Advisors. The wind industry had close to $4.8 billion in transaction value in 2010, which included private fund-raising deals, initial public offerings, and mergers and acquisitions. Solar generated a transaction value of $3.2 billion, and energy efficiency, which includes smart grid and LED lighting companies, followed with $2.5 billion. The transaction values run parallel to the cleantech investing numbers for 2010, which found that solar startups continued to draw the most money in venture capital investment last year, while energy-efficiency startups garnered the largest number of deals, according to the Cleantech Group. However, given utility-scale wind is a more matured market, there are fewer investments in next wind technology startups. A bulk of the transaction value that went to wind was for building energy generation projects, the report noted. An analysis by the Solar Energy Industries Association (SEIA) showed that wind energy companies had grabbed the most money from a Treasury Department program that was set up in 2009 to subsidize renewable energy generation construction. As of November of last year, money that went to wind companies accounted for 85 percent of what the government had given out (solar took 8 percent). In terms of the number of deals, the energy efficiency sector took the top spot, garnering 104 deals (fundraising rounds and M&A) last year, the Peachtree report said. Solar ranked second with 99 deals, followed by wind with 35 deals. The report surmised that the strong interest in energy efficiency companies and projects will continue partly because they require less money and give quicker returns than more capital-intensive businesses such as solar and biofuel. Apparently, psychology also played a role, the report said, noting that many so-called energy-efficiency technologies are formerly called information technology and many investors came from the IT world.