Investment in cleantech companies is down 63 percent in Q1 2009, after a record year for funding in 2008. $277 million in cleantech investments was raised in the first quarter of 2009, according to Ernst & Young. In addition to the decline in revenue dollars, there has been a 48 percent decline in deals compared to Q1 2008. "This economic climate demands that cleantech companies think more creatively about resources and partnerships,” said Joseph A. Muscat, Americas Director of Cleantech at Ernst & Young.

The best performing cleantech segment was energy storage, which more than doubled its 2008 funding in 2009, reaching $114 million in Q1 of this year -- 41 percent of total cleantech funding this quarter. Battery storage and fuel cell companies also performed well, raising $69 million and $45 million respectively.

The energy/electricity generation was hit hard this quarter, as investments fell 73 percent from Q1 2008, dropping to $56 million, of which $48 million went to solar companies.

Ernst & Young believes that investments will increase following further government and corporate measures.

"Despite the intense challenges of raising capital during the past four months, government initiatives and corporate commitments are points of light for cleantech companies," Muscat said.

"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," Muscat said.

By Mark Alvarez