Cleantech VC plunges

Ernst & Young announced that Q1 VC investments in cleantech have fallen dramatically. As the SF Chronicle reports

Compared with the first quarter of 2008, investments dropped 63 percent, to $277 million, and the number of deals was down nearly 50 percent, to 24, according to Ernst & Young.

Investments in electricity generation fell 73%. eSolar of Pasadena got $40 million of the $56 million of investments.

The drought in capital spending — and end to any near-term exit possibilities — is overwhelming any positive effect of the Obama administration’s support for clean technologies. As a WSJ blog concluded

So what’s the outlook? Just like more mature corners of the clean-energy industry—just like all industries, come to think of it–clean tech is hunkered down and waiting for Washington to prime the pump.

“While the timing of the receipt of government funding is uncertain, we expect that loan guarantees and other government financing structures, as well as corporate adoption rates of clean technologies, will be early indicators of an upward investment cycle,” said Joseph A. Muscat, Ernst & Young’s Americas Director of Cleantech.