Innovation Asset Blog

As green energy sector emerges, analysts debate over sources of investment

U.S. venture capital firms invested more than $5 billion in the emerging clean tech industry in 2010, according to a report from Ernst & Young. The figure is up from a mere $2.6 billion worth of investments in 2009, reflecting a growing interest in renewable energy sources.

Still, the investments accumulate only a minor portion of the energy industry. General Electric, for example, has already pledged $2 billion per year over the next five years toward energy innovations. This is in addition to GE's recently announced $2 billion investment in Chinese innovation and intellectual assets.

While there has been a relatively minor contribution from the country's venture capital wing, many analysts predict more substantial development will stem from the acquisitions market.

"At the corporate level there's an acceleration of activity on the investment and acquisition side," Gil Forer, Ernst & Young’s clean tech leader, told Bloomberg earlier this week. "We definitely expect it will continue to accelerate in 2011 and going forward."

Others maintain that what the industry needs is a cross-channel funding initiative, attracting investment from private firms, acquisitions, startup investors and even government grants and programs.

Earlier this month, industry leaders met at the Energy Innovation 2010 conference in Washington, D.C., to discuss the current status of U.S. energy policy, acknowledging that the country's chief priority in regards to the burgeoning green energy market should be in research and development.

Peter Ackerman

Peter Ackerman

Founder & CEO, Innovation Asset Group, Inc.