2011 is shaping up to be the second-most lucrative year ever for investment in renewable energy technology, second only to 2008. It is well-documented that venture capital for clean technology fell off a cliff along with the rest of the economy in the recession; funding recovered slightly, however, in 2010 and is now expected to grow for a second consecutive year in 2011.
The bad news? While also predicting the 2011 year-end increase in venture funding, clean tech research and consulting firm Kachan and Co. also predicts that investments will drop in 2012, due to, among other things, policy uncertainty and the fallout from the recent collapse of solar panel maker Solyndra, LLC. Kachan Managing Partner Dallas Kachan writes:
There’s no mistaking that the (now expired) American national loan guarantee program helped loosen private cleantech capital in an immediately post-2008 shell-shocked economy. However, continued uncertainty over the future of the U.S. Treasury grants program and production tax credits is holding the U.S. back.
In other words, private investors don’t want to pump money into renewable energy because they’re not sure that existing policy benefits will still be there a year from now. Why? Continue reading