Global cleantech venture funding fell 33 percent in 2009, according to research from the Cleantech Group and Deloitte. Even with the decline, it remained tech’s strongest sector for funding. In 2009, the cleantech industry received $5.6 billion in funding, compared to $8.5 billion in 2008. It was the worst year for cleantech venture capital since 2006. The three biggest sectors for cleantech funding in 2009 were solar ($1.2 billion), transportation ($1.1 billion) and energy efficiency ($1 billion). The Cleantech Group and Deloitte expect that 2009 totals will increase 5-10 percent when companies finish reporting their annual activity.

While the total dollars declined, the amount of deals remained consistent in 2009 (557 vs. 567 in 2008). This is in line with other industries, as investors prefer to make more deals worth fewer dollars.

The Cleantech Group and Deloitte expect that when the final 2009 financials have been reported, last year will have had a record number of deals.

“Record levels of activity from investors, governments and corporations in 2009 demonstrated that the market for clean technologies continues to strengthen regardless of any non binding global climate change agreement,” said Nicholas Parker, Executive Chairman, Cleantech Group.

“In parallel to trying to reach carbon agreements, governments spent the year earmarking hundreds of billions of dollars for clean technology in pursuit of economic growth,” Parker said. “And in the private sector, about a quarter of all global venture investment capital was invested in cleantech in 2009—more than software, biotech or any other category.”

North America’s cleantech funding share fell from 72 percent of global investments in 2008 to 62 percent in 2009, due to increased global efforts at cleantech financing. $3.5 billion dollars were invested in cleantech ventures in North America, down 42 percent from 2008.

“A number of factors appear to be at play regarding North America’s decline in cleantech investment,” said Dallas Kachan, Managing Director of Cleantech Group. “The drop underscores how cleantech innovation has continued to globalize. North America’s historic cleantech innovation and capital advantage may grow less distinct over time.”

The first year cleantech funding broke $1 billion was 2003.

By Mark Alvarez