Clean Energy Investing: Big Money Bets on Small Green Projects
As we routinely say in the Prosperity Dispatch investment newsletter, the key to finding successful investments comes from finding opportunities where the reward far outweighs the risk.
The low risk/high reward investment opportunities aren’t always easy to find or readily available for most investors, but one group of investors who are always placing small bets in hopes of reaping big rewards is in venture capital.
Venture capital investing is high risk/high reward. It’s potentially more lucrative than any other type of investing. And, since it takes anywhere from five to 10 years for most investments to pay off, venture capital investors are true long-term thinkers.
That’s why it’s no surprise venture capital investors are betting big on the green energy/clean technology trend.
Reuters reports Clean technology top US venture investment:
Clean technology has for the first time become the top category in U.S. venture capital investment, eclipsing biotech and software, as private money follows the government's lead, the Cleantech group reported.
"Governments are having an effect -- emboldening private capital to get back in the game," said Dallas Kachan, managing director of Cleantech Group, a research and advisory firm which issued its third quarter report on Wednesday.
Solar was the leading category in $1.59 billion invested worldwide in 134 companies that make items such as electric cars, advanced batteries, green buildings, energy efficient building materials and renewable fuels and chemicals.
In the United States, clean tech won 27 percent of venture capital investment in the third quarter, ahead of biotechnology (24 percent), software (18 percent) and medical devices (17 percent).
Clean technology continues to attract more and more capital. And when you consider the length of time venture capital investors must assume will be between initial investment and the big payday (if any), there is a true long-term opportunity here.
As we featured the other day, the IPO of lithium-ion battery manufacturer A123 Systems (NASDAQ:AONE) is just a sign of things to come. There will be big opportunities in such clean technology investment areas as solar, wind, and geothermal energy.
Our investment research at Q1 Publishing points to investing in lithium-ion hybrid car batteries as being the biggest investment opportunity in the clean-tech space and we’ll continue to cover it in the months and years ahead.
