Research firm says a cleantech bubble is looming

Warning signs of a bubble are flashing in the cleantech energy technology segment, where initial public offering (IPO) values and venture capital deployments more than doubled last year.

This is the key takeaway from The Cleantech Report from Lux Research. Its authors call it "the first comprehensive reference study on energy and environmental technologies," [ed.: no doubt to the chagrin of Cleantech Group and CleanEdge, which publish reports on the sector]. It was released today.

Its authors say the rise in R&D funding to $48 billion in 2006, up 9% from 2005, "sets the stage for a boom and bust."

Lux defines cleantech as five top-level segments: energy, air, water, waste, and sustainability—the latter a catch-all for everything that doesn't fit into the other four buckets.

“Driven by solar and biofuel deals, the energy segment looks overheated—there’s no way that more than a fraction of the 930 energy start-ups operating worldwide can possibly succeed. But the attention to energy masks neglected opportunity in other segments: For example, the waste segment accounted for 32% of merger and acquisition value last year but only 1% of IPO value and 4% of venture capital,” said Lux Research President Matthew M. Nordan (follow the Cleantech Group's waste-to-energy coverage here.)

In two volumes and more than 600 pages, The Cleantech Report delivers analyses of key clean technologies, data and profiles of more than 200 start-up, midsized and large companies.

The study finds cleantech is not a U.S.-centric phenomenon, calling Asia/Pacific region the R&D leader, leading in 2006 government funding (38%), corporate R&D spending (34%), and scientific publications (38%).

Europe has been the IPO leader to date, the study says, citing a majority (55%) of IPO value in 2005 and 2006 from European companies. The U.S. leads only in 2006 venture capital deployed (72%) and patents issued (46%).

The authors estimate approximately 1,500 cleantech start-ups operate worldwide: 930 in energy, 45 in air, 90 in water, 120 in waste, and 315 in sustainability.

It also says 29,874 scientific journal articles were published on cleantech topics in 2006, while 4,093 U.S. patents focused on cleantech were issued. U.S. cleantech patents issued have grown at an average of 5% per year since 1995, double the rate for patents overall.

The Cleantech Report is available for purchase immediately from Lux Research for $4,795 USD. Additional user licenses are $995. Educational discounts and site licenses are available.

For more information:

www.luxresearchinc.com/cleantech