Venture capital investments in clean technology reached an impressive $5.18 billion last year in North America and Europe. North American-based companies received three times the investments of the European-based companies. Not surprisingly, energy generation was responsible for $2.75 billion in investments, with solar energy shining.

“In 2007, solar emerged as a significant investment theme, and it was notable to us that of the top five solar deals of the year, three of the largest were solar investments in China and India,” said Cleantech Group Managing Director of Global Marketing Kristina Messdaghi.

Emerging solar technologies appear to be very promising, potentially dropping the cost of solar energy considerably. Nanosolar coating for example may lower the cost of solar energy to $1 a watt and does not require silicon. Over the last few years, this technology has received significant investment from venture capitalists.

Solar manufacturing capacity has been increasing considerably. Sharp Solar announced early last year that they will double production in Europe from 110 to 240 MW annually. Sharp increased production in Japan in 2006 to a staggering 600 MW. The Nanosolar plant in San Jose, California plans to produce 250 MW in 2008 and 430 NW in 2009.

Policy has helped fuel this increase in demand for solar energy. 20 countries in Europe now have electricity buy-back guarantee programs. 40 states in the U.S. have net-metering programs, with New Jersey, California, Colorado, Pennsylvania, and Maryland having highly regarded programs. Net-metering requires the utility companies to purchase surplus electricity generated from small-scale wind and solar systems, thus giving an incentive to system owners. Such programs also reduce the cost of residential solar and wind systems because they eliminate the need for batteries, while boosting the efficiency of the solar system.

Cleantech has certainly gained recognition by many venture capitalists and is seen by many as a lucrative opportunity. Many investment opportunities are also springing up for more casual investors with renewable energy mutual funds and exchange traded funds.

CRS has been in the renewable energy certification and verification business for ten years. Their Green-e certification programs provide assurance to consumers that the businesses sporting the Green-e logo meet the program's requirements for renewable energy options. Now Green-e is expanding their certification guidelines to include Greenhouse Gas Reduction (GHG) products.

While most companies assure customers that money spent on GHG reduction products, like personal renewable energy credits, will go towards specific things like planting trees or funding wind farm projects, there are currently no standards or verification processes in place.

CRS hopes to fill this void with the Green-e GHG Product Certification Program, which will set product standards, develop a verification process and release consumer disclosure guidelines.

The details of the Green-e GHG program are still being finalized. CRS is working with a governance board, an advisory group and stakeholders in the development of the standard. While the governance board and the advisory group are made up of industry experts, and environmental organizaitons and businesses, anyone can be a stakeholder and give input on this process. All of the documents involved are downloadable at Green-e.org.

One important factor in this certification process is the issue of additionality, or making sure that GHG reduction products sold to customers are verified, that they aren't counted elsewhere and that money goes towards projects that would not have happened without the carbon market. Strict additionality standards will add credibility to the voluntary carbon market and ensure that your purchase really will make a difference.

Green-e analyst Lars Kvale stresses, however, that regardless of certification, consumers should not buy carbon credits in lieu of reducing their own green house gas emissions.

What we're trying to do with the certification program is to enable consumers to offset their emissions they can't reduce… For example, most environmentally minded folks still take airplane trips and you can't buy a ticket for a renewable powered airplane. That's just not possible right now.

So this is where folks are coming and saying, well if i can't do that, let me do what's the next best, which is to get a reduction somewhere else. Then on balance it will even out with the understanding that yes, it doesn't mean my airplane does not have any impact, it means I'm offsetting that impact. [This program will] enable that to work for consumers. It's not an instead of, but really in addition to energy efficiency and buying renewable energy.

Green-e has invited sellers of GHG reductions to participate, including the Chicago Climate Exchange (CCX) and Gold Standard. The Green-e GHG Product Certification Program is expected to roll out this summer.

Illustration: Ilana Kohn