Sheeraz Haji, chief executive of the Cleantech Group, which tracks global investment in the sector, says the working title for his fourth quarter 2011 presentation was "Cleantech did not implode".
Indeed, taken as a whole, investment numbers in 2011 present "some surprising signals of real strength".
Mergers and acquisitions (M&A) in the sector more than doubled to a record of $41.24bn, for deals with values disclosed, demonstrating "incredible interest by global corporations", he says.
Venture capitalists continued to fund cleantech companies, putting nearly $9bn into 713 deals, with the solar industry maintaining its position atop the dollar-value leader board. Meanwhile, "wind is not a popular category for venture and innovation investments", Haji says. Only 29 deals were done in the sector last year, down 9.4% from 2010.
Haji says venture capitalists (VCs) are approaching their investments differently in the wake of the Solyndra failure. The cylindrical thin-film PV manufacturer, which had raked in close to a $1bn in private financing and half that again through a federal loan, went bankrupt and became the headline-making centre of Congressional and FBI investigations. Investors felt burned by the negative attention.
Where before the VC firms would tout their Washington, DC, connections, they are now showing a "huge bias" toward deals that do not depend on government support or regulation, he says.
Investors are pouring more money into existing portfolios -- leading to fewer early stage funding rounds and larger individual deals -- because cleantech companies are having difficulty going public.
While M&A boomed in 2011, "the [Initial Public Offering] window has effectively been shut," Haji says.
The Cleantech Group tracked IPOs by 51 companies in 2011, raising $9.6bn, down from $16.41bn raised through 96 deals in 2010.
Haji says there is a strong pipeline of cleantech companies poised to go public, but he does not expect markets to open until existing cleantech issues generate better returns. His firm's index of public equities in the sector significantly under-performed the S&P 500.
In solar, power tower technology and project developer BrightSource Energy "needs to raise money", he says. The company filed IPO plans last year, but has yet to go out on the market. "We think it'll happen, but that's one to watch closely."
Cleantech investment was centred in North America, which attracted 75% of the tally last year. There were fewer deals done in Europe, as the continent's macros challenges impacted dedicated cleantech investment funds and broader funds alike.