Frost & Sullivan projects tripling in venture capital funding for renewable energy

In a recent report entitled, “Venture Capital Funding in Renewable Energy in Europe,” Frost & Sullivan says that regulatory policies, support for carbon footprint reduction and technological innovations will drive venture capital funding in the renewable energy sector. The consulting firm projects that venture capital funding in this sector will triple by 2020.
The report was based on studies of investment opportunities in the solar, wind, biofuels, geothermal, marine and hydropower sectors. While Europe and North America have been the leading markets for venture capital funding in the renewable sector, investors are also interested in the emerging markets of South Asia and Asia-Pacific.
According to financial analyst Vinod Cartic, the number of deals in the sector increased by two-thirds in 2011, but total deal value went down by one-third. This shows that more, but smaller, deals were signed in Europe, followed by Asia-Pacific, while deals in North America were fewer, but of larger values.
New green energy technologies are currently the most attractive investments and some promising developments include: thin-film solar and advanced biofuels, such as cellulosic biofuels and biofuels from algae. Investments in sustainable energy have expanded, including energy storage, energy efficiency and smart-grid technologies.
The report also noted that some of the main constraints in the renewable energy sector are the high capital costs, the constant investments needed in technology, and the fact that economies of scale have not yet been reached. (November 22, 2012)