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Global solar VC funding triples

13 Apr 2011

Global solar sector venture capital (VC) funding has nearly tripled in the last quarter, making the first quarter of 2011 the best quarter for VC funding since the second quarter of 2010.

The leap in VC funding is likely to lead to a sigh of relief in other aspects the clean technology industry, since the sector is still battling its way through realised and pipeline subsidy cuts in the UK and other parts of Europe.

The recent quarter has been second best in terms of VC solar backing since the closing quarter of 2008 when the economic downturn took hold, according to clean technology consultancy Mercom Capital.

Its figures have shown that 25 solar VC deals worth $658m took place in the first quarter of 2011, compared to a high of $948m in the second quarter of 2010.

VC funding of the solar sector dropped to just $238m in the fourth quarter of 2010, hitting an industry-wide slow-down.

Solar VC funding levels also dimmed in early 2010, coming in at $311m during the first quarter.

US venture capitalists made 87 per cent of the transactions recorded in the first quarter of 2011, while 89 per cent of the recipient solar companies were also based in the country.

‘Looking at the first quarter funding activities, it is clear that VC investor’s appetite for solar has not gone away. In fact, this was the best VC funding quarter since the second quarter of 2010 and the second best quarter since the fourth quarter of 2008,’ said Raj Prabhu, managing partner at Mercom Capital Group.

‘When it comes to VCs investing in solar, the US continues to dominate.’

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