Venture Capital is moving away from energy creation projects according to an article written by Mark Scott for BusinessWeek. Wind farms and solar power plants are simply too capital intensive and risky projects for the VC. Both banks and more government support is needed for the green energy projects.
Scott sees this development in a positive light:
Call me an optimist, but I see this financing trend as a good thing. Ten years ago, cleantech was an also-ran for the investment community. It’s not surprising, then, that venture capitalists, who back early-stage industries, were the biggest funders. Now, the sector is becoming more mainstream (though it’s still relatively small in overall dollar terms), so increasingly institutional investors are taking the lead. It’s just a consequence of cleantech becoming a mature industry.
According to Scott, the next hot trend in the cleantech might well be energy efficiency from industrial manufacturing to household consumption. Consequently, “that sector could now be worth a second look” for any investor.