Summary
As stated in this source article, overall cleantech investment growth is expected in 2010 driven by energy efficiency and IPOs in Asia that are increasingly dominating the sector. Amidst increasing Chinese cleantech venture funding, the overall trajectory of the U.S. economy and stock market will have play a role in global financing over the course of the year.
Analysis
As published in this core template article, yesterday, the DOW average ended down 268.37 points, its worst single-day decline in points, since April 20, 2009. The stock market measure was off 2.6 percent for the day to end at 10,002.18, a three-month low. In addition, the NASDAQ fell 2.99 percent, and the S&P 500 dropped 3.11 percent. The old saying, supported by a highly predictive trend over recent decades, "so goes January, so goes the year," is holding true thus far, as last month showed a downward trend for all major averages. It is believed that investors were affected by worries over European government financing issues for their debts, in addition to jobs data showing America's employment picture may not be improving as much as expected.
Amidst all of the talk over job creation in the U.S., it has been just that, only talk. Significant job creation is merely a dream until comprehensive policy can be administered in Congress or across the majority of states through their Assemblies. As ideas are floated around in Washington concerning measures such as transferring unused TARP money to small business job creation programs, it is likely that more rocky days like this will occur on Wall Street.
Green jobs will remain more of a buzz term than a reality until transformative clean energy policies are adopted. One can only guess what the impact of approving comprehensive energy reform would have been if the U.S. Senate initiated it by passing the American Clean Energy and Security Act in July. It would have likely generated more job creation than the endless debate on health care reform.
As leaders of major carbon-polluting countries failed to approve binding climate change legislation in 2009, global cleantech investment fell along with the rest of the economy. According to market analysts at Cleantech Group, investment in clean technology tumbled 33 percent to $5.6 billion in 2009, down from $8.4 billion in 2008. Even though there was a decline in total money invested, there were likely more cleantech venture capital (VC) deals in 2009 than in any other year. The number of VC deals across North America, Europe, Israel, China and India, was approximately 557 in December of 2009, but that figure may be increased by at least 5 percent once the final data is tallied.
The cleantech sector continued to outpace software, biotechnology all other industrial sectors. Solar was the leading investment category, as in several years past, but by a slimmer margin than before. Solar received 21 percent of the year's cleantech investment, down 64 percent from 2008. It is no surprise that highly capital intensive concentrating solar power (CSP) was reduced the most, down 91 percent from 2008, while thin-film photovoltaics were only down 71 percent. In general, funding of CSP solar projects is derived from 50 percent debt financing, 30 percent grants and tax credits, and 20 percent equity. These points were reiterated at last week’s Arizona Solar Manufacturing Symposium in Phoenix, AZ.
In 2009, there were 32 cleantech initial public offerings (IPOs) world-wide, raising $4.7 billion. Not surprisingly, approximately 50 percent were in China, nearly equivalent to 75 percent of total global initial public offering IPO capital, according to the report. In the previous 3 years, Asia was less than 10 percent. The leading IPO of the year was China Longyuan Power Group, the country's largest wind power producer, raising $2 billion on the Hong Kong stock exchange. China’s robust economy, employment situation, and stock market will benefit from its cleantech surge, while the U.S. may become mainly consumers, leading to lower-paying installation, sales and service jobs, unless it can bolster its cleantech manufacturing sector via incentive programs, as have been implemented in many Asian countries.
Overall cleantech investment growth is expected in 2010 driven by energy efficiency and IPOs in Asia that are increasingly dominating the sector. Energy efficienct products typically have a faster time-to-market, ease of integration, higher return-on-investment and are based on more mature technologies compared to other areas of cleantech. Amidst increasing Chinese cleantech funding, the overall trend of the U.S. economy and stock market will have play a role in global financing over the course of the year.
Amidst all of the talk over job creation in the U.S., it has been just that, only talk. Significant job creation is merely a dream until comprehensive policy can be administered in Congress or across the majority of states through their Assemblies. As ideas are floated around in Washington concerning measures such as transferring unused TARP money to small business job creation programs, it is likely that more rocky days like this will occur on Wall Street.
Green jobs will remain more of a buzz term than a reality until transformative clean energy policies are adopted. One can only guess what the impact of approving comprehensive energy reform would have been if the U.S. Senate initiated it by passing the American Clean Energy and Security Act in July. It would have likely generated more job creation than the endless debate on health care reform.
As leaders of major carbon-polluting countries failed to approve binding climate change legislation in 2009, global cleantech investment fell along with the rest of the economy. According to market analysts at Cleantech Group, investment in clean technology tumbled 33 percent to $5.6 billion in 2009, down from $8.4 billion in 2008. Even though there was a decline in total money invested, there were likely more cleantech venture capital (VC) deals in 2009 than in any other year. The number of VC deals across North America, Europe, Israel, China and India, was approximately 557 in December of 2009, but that figure may be increased by at least 5 percent once the final data is tallied.
The cleantech sector continued to outpace software, biotechnology all other industrial sectors. Solar was the leading investment category, as in several years past, but by a slimmer margin than before. Solar received 21 percent of the year's cleantech investment, down 64 percent from 2008. It is no surprise that highly capital intensive concentrating solar power (CSP) was reduced the most, down 91 percent from 2008, while thin-film photovoltaics were only down 71 percent. In general, funding of CSP solar projects is derived from 50 percent debt financing, 30 percent grants and tax credits, and 20 percent equity. These points were reiterated at last week’s Arizona Solar Manufacturing Symposium in Phoenix, AZ.
In 2009, there were 32 cleantech initial public offerings (IPOs) world-wide, raising $4.7 billion. Not surprisingly, approximately 50 percent were in China, nearly equivalent to 75 percent of total global initial public offering IPO capital, according to the report. In the previous 3 years, Asia was less than 10 percent. The leading IPO of the year was China Longyuan Power Group, the country's largest wind power producer, raising $2 billion on the Hong Kong stock exchange. China’s robust economy, employment situation, and stock market will benefit from its cleantech surge, while the U.S. may become mainly consumers, leading to lower-paying installation, sales and service jobs, unless it can bolster its cleantech manufacturing sector via incentive programs, as have been implemented in many Asian countries.
Overall cleantech investment growth is expected in 2010 driven by energy efficiency and IPOs in Asia that are increasingly dominating the sector. Energy efficienct products typically have a faster time-to-market, ease of integration, higher return-on-investment and are based on more mature technologies compared to other areas of cleantech. Amidst increasing Chinese cleantech funding, the overall trend of the U.S. economy and stock market will have play a role in global financing over the course of the year.
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Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
