Clean Energy Stocks, Solar, and Transportation Start-Ups Shine in Q3


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Chart: Bloomberg New Energy Finance

Cleantech investment decreased worldwide in the third quarter of 2013, but clean energy stocks and solar deployment are showing strong growth this year, according to data released in October by two leading research and consulting firms. In addition, a transportation-sector cleantech company closed the largest U.S. venture capital deal of the quarter: Uber, a San Francisco-based operator of a mobile-based taxi/town car booking and payment service, raised $258 million from Google Ventures, TPG Capital and Benchmark Capital.

Global investment in clean energy was $45.9 billion in the third quarter of 2013, down 14% on the second quarter of this year and down 20% on Q3 2012, according to Bloomberg New Energy Finance (BNEF). Among the major countries, overall clean energy investment increased in Brazil, Italy, and the U.K. but decreased in the U.S., China, India, Japan, Germany, and France. The Americas (outside the U.S.) was the only region to show a rise in investment activity on both the quarter and the year.

Based on Q3 data, BNEF projects that investment in renewable energy and energy-smart technologies such as smart grid, efficiency, storage and electric vehicles will end 2013 below last year’s $281 billion level.

However, despite fewer dollars invested, BNEF data indicates that installation of solar photovoltaic (PV) power capacity worldwide will set a new record in 2013—an estimated 36.7 gigawatts—due to much reduced costs per megawatt (MW).

BNEF also notes a contrast between overall investment in the sector, which decreased, and the strong performance of clean energy shares on stock markets around the world.  Clean energy shares on October 9, 2013 were nearly 47% up on the year so far and 74% above their lows reached in late July 2012, as measured by the WilderHill New Energy Global Innovation Index which tracks 96 quoted companies worldwide.

Asset finance of utility-scale (1MW-plus) renewable energy projects was $26.4 billion, down from $31.9 billion in the second quarter of this year and $34.8 billion in Q3 2012. However, investment in small-scale capacity of less than 1MW—predominantly rooftop solar on homes and business buildings—was $17 billion in Q3, level with the previous quarter and below third quarter 2012′s $20.1 billion only because the cost of PV panels has come down so sharply.

Investment in clean energy companies via the public markets was $2 billion in the third quarter, down from a very strong $3.8 billion in the second quarter of 2013 but above the $1.6 billion of Q3 2012.

Worldwide venture investment across all clean technology sectors totaled $1.4 billion during Q3 2013, according to Cleantech Group, 26% lower than the previous quarter ($1.9 billion).

The leading sector by amount of venture capital invested was Transportation with $352 million (up 157% on Q2), followed by Energy Efficiency with $205 million (down 53%), and Biofuels & Biochemicals with $173 million (down 38%). In terms of deal volume, Energy Efficiency continued to lead, closing 33 funding rounds (down 35% on Q2), followed by Transportation, with 22 deals (down 21%) and Solar with 21 deals (up 5%).

Advanced Materials attracted $92 million across 17 venture deals, Agriculture attracted $89 million across 13 deals, Energy Storage attracted $55 million across nine deals, Smart Grid attracted $50 million across nine deals, and water attracted $37 million across 15 deals.

Notable venture capital, M&A transactions, and Initial Public Offerings (IPOs) tracked by Cleantech Group are detailed here.