With the global economic downturn, clean technology investments have collapsed. Investment in energy storage, however, has actually increased.
Energy storage- specifically batteries and fuel cells- has always been a touchy market. It takes years of research and development and gobs of cash to bring a new energy storage system to market, part of the reason why Toyota was so reluctant to leave the nickel-metal-hydride batteries it has invested so much money in. There are more failures to be seen than successes in this industry. The fact that investment in batteries and fuel cells has actually increased is surprising.
Part of the reason for increased investment in batteries and fuel cells is because of the government’s stimulus package with plenty of provisions to provide cash for clean technologies. However, most of this money is still in government hands as the government agencies are still determining how to hand it out.
In addition to the money set aside ($2 billion) for clean technologies in the recent stimulus package, the government made $25 billion in direct loans available for advanced vehicles. The $25 billion in loans includes energy storage solutions for vehicles. Venture capitalists seem to be responding to the huge government support shown for the advancing industry.
Prime examples of investment in the industry are Lilliputian Systems out of Wilmington, Massachusetts, and A123 Systems out of Watertown, Massachusetts. Lilliputian Systems raised $28 million earlier in April and A123 Systems recently raised $69 million, $15 million of which is from General Electric. Overall the energy storage industry raised $126 million in the first three months of the year, an increase of 12.5 percent versus the $112 million invested in the first three months of last year.
Source: New York Times Green Inc.