Alternative energy resources are reaching companies via increased financing from venture capitalists and lenders at a time when other small companies are suffering the economic downturn and being turned away by investors. This influx of resources is allowing many alternative energy companies to hire more staff, revamp marketing efforts and expand geographically.
During the previous administration in 2008, alternative energy was hailed as “the brightest sector in venture capital over the last year,” by Brian Fan, research director at Cleantech Group, an industry trade organization in San Francisco. The current Obama administration’s efforts to boost alternative energy resources are stoking activity in private venture-capital outreach.
In 2008, investments in alternative energy companies totaled $8.4 billion, up nearly 40% from 2007, according to Cleantech Group. The third quarter alone set a record, with venture capitalists poured $2.6 billion into clean technology. In the fourth quarter, they invested $1.7 billion.
Yet the credit crunch and nose-diving energy prices are prompting companies to scale back or cancel alternative-energy projects.
In 2008, research firm New Energy Finance predicted total spending on clean-energy projects was expected to fall 4% to $142 billion from 2007. But venture capital and private-equity firms are still investing in alternative energy resources, largely due to the President Barack Obama’s administration and its efforts to boost the sector.
