Austin Named #1 Cleantech City in U.S.

Austin Named #1 Cleantech City in U.S.

With the current instability in energy prices and growing concern about global warming, the field of clean technology -- everything from biofuels to green chemistry to renewable energy -- is quickly becoming a hot investment topic.

SustainLane Government, an online resource center that offers sustainability tips to state and local government, has ranked the five U.S. cities that are hotbeds for the influx of cleantech capital, deep R&D, and real-world opportunities for field-testing and prototyping.

Austin, Texas, home to seven start-ups developing technologies like internet-controlled irrigation and wind and geothermal energy technologies, stands out as the leading city for cleantech investments. Austin features the Clean Energy Incubator, a university- and government-funded project to help clean energy companies grow, and the city also leads the field with combined venture capital, an R&D partnership through the University of Texas, and active incubator collaboration with city-owned Austin Energy for testing new Cleantech technologies.

The other cities in SustainLane's top-five rankings are:
  • 2. San Jose, Calif. Draws upon strong existing Silicon Valley semiconductor engineering base and IT venture networks. Focus is on solar energy and nanotechnology.

  • 3. Berkeley, Calif. With a new $500 million biofuels research center funded by British Petroleum at the University of California at Berkeley, Berkeley also hosts the federal Lawrence Berkeley Laboratory.

  • 4. Pasadena, Calif. The home of California Institute of Technology also features NASA's Jet Propulsion Lab and an active network of angel investors backing a broad range of renewable energy start-ups.

  • 5. Greater Boston, Mass. With state-funded renewable technology grants and dozens of regionally based start-ups, Cambridge's Massachusetts Institute of Technology (MIT) appears to be the epicenter of a potent metro-area cluster.
Runners-up cities included San Francisco, New York, Seattle, San Diego and Houston.

"These regions promise to be new economic power centers for the rest of the century," said SustainLane CEO James Elsen. "It all starts with cities attracting the money, brains and the means for Cleantech innovation on a massive scale."

SustainLane defines Cleantech by the following criteria:
  • Energy generation, management, storage, and energy efficiency, including solar, wind, geothermal, fuel cells and hydrogen.

  • Advanced transportation technologies and biofuels.

  • Materials and Green Building, including advanced materials and engineering approaches, materials recovery.

  • Water- and air-related technologies.
Through its network city, state and county government officials and access to more than 500 best practices serving government sustainability, SustainLane was able to determine which cities effectively combine Cleantech investments, infrastructure and supportive policies into a physical "cluster."

The ideal model for a Cleantech incubation cluster integrates venture capital and investor network access, including mentoring, with academic or federal research lab collaboration and active local government participation (field testing, prototyping and incentives).

Cleantech is gaining rapid acceptance as a defined investment category amongst venture capital firms. In 2006, Cleantech companies received a record $2.9 billion in the United States out of $25.5 billion investments, according to CleanTech Ventures.