Good news for green: Smart grid venture capital investments almost doubled in 2010

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Despite a fragile and recovering economy, 2010 was a very good year for smart grid, wind and solar venture capital investments and mergers and acquisitions, according to a just-released report from energy market intelligence and consulting firm Mercom Capital Group. "It was a banner year for smart grid in terms of VC funding and M&A activity, with VC funding almost doubling compared to 2009," said Raj Prabhu, managing partner at Mercom. He added that 87 different investors participated in VC rounds in 2010.

Smart grid VC funding was at its highest with $769 million in 51 deals, an 88% increase over 2009. M&A action also was strong for the smart grid sector with 40 transactions, the largest of those being the ABB acquisition of Ventyx for over $1 billion. Wind did very well with a 40% increase in funding activity, with some help from large offshore wind projects. More large-scale solar project funding also was reported.

Quick Take:   Here's another report documenting how smart grid has become one of the cleantech darlings. What it does not show is the activities of the industrial giants, who are pouring hundreds of millions into the sector. In particular, Chinese, Japanese and Korean electronics firms have targeted smart grid as a next growth sector. And Indian IT firms, which have grown rich from two decades of outsourcing, are beginning to create smart grid offerings as well. – Jesse Berst

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