Funding in the cleantech sector may be up this year, but performance isn't following. The latest research from Bank of America Merrill Lynch (BAC) puts the sector down 15% since the beginning of the year. Steven Milunovich, the bank's U.S. renewable energy analyst, indicates that the sector may be staring down unprofitable growth for the rest of 2010. On a conference call, he said, "We are going to have growth, I am not concerned with this over time. What I am concerned about is profitability."

Milunovich said, "Clean technology stocks performed very well in 2007 and 2008 when there was a lot of issuance in the wind space. But in 2009, our index was down 60 per cent versus the market,' he said, on a conference call." Bank of America estimates that the sector as a whole has annual revenues of $100 billion, with an aggregate market cap of $200 billion.

The tree-hugging sector has found its way back into the spotlight. A new report from the Cleantech Group, in conjunction with Deloitte & Touche, pegs venture capital in the cleantech sector up 29% from the fourth quarter of 2009 to the first quarter of this year -- and up 83% year over year. In fact, VC action in cleantech set a new record for the number of deals closed (the previous best, 165, was set in the prior quarter). A total of $1.9 billion was invested last quarter in 180 cleantech companies.

According to Sheeraz Haji, president of the Cleantech Group, "The first quarter's bounce back in terms of venture capital investment compared to 2009's early lows bodes well for what we think is in store for the remainder of the year." Haji continues, "North America was particularly dominant this quarter."

The clean technology sector was a lone glimmer of hope for the venture capital business through the financial crisis and ensuing recession. Quarterly updates gave positive news despite the destruction of capital elsewhere in the global financial markets. Now that the results are in for 2009, however, the outcome isn't as positive as many expected.

According to data from market research firm Cleantech Group and accounting and consulting firm Deloitte, venture capital funding fell 33% last year, but still held up better than the market as a whole.

How do you know the green finance sector has arrived? Well, it got its first Ponzi scheme! Allegedly.

The SEC filed charges against four people and two companies in a Denver federal court on Monday. Mantria Corp. and its principals, Troy Wragg and Amanada Knorr, stand accused of running raising $122 million from more than 300 investors in what could be a dozen fraudulent offers of securities. Mantria engaged Speed of Wealth LLC, run by Wayde and Donna McKelvy, to dump the cash out of their retirement plans and tap their home equity to "invest" in Mantria, which they said was offering returns ranging from 17% to "hundreds of percent" every year.

Sunny skies are here for Ausra, the solar thermal company backed by Kleiner Perkins and Khosla Ventures. The company is looking for a buyer, and it's already talking to three, according to a report by Reuters. Everything is up for grabs, from a majority stake in the company to 100% of it, and the back-and-forth going on is at a "very aggressive level."

The businesses looking to pick up Ausra are said to be global power generation conglomerates but haven't been named yet. So, the clean energy company would be a way for one of them to diversify.

The clean technology private equity momentum continues. In New York, a group of partners has launched NewWorld Capital Group, a private equity firm that will focus on mid-market investments in clean energy infrastructure companies in the United States and selectively in Europe.

The new fund will work closely with Ambienta, a European environmental assets private equity firm in Italy. Both said they plan to collaborate on finding and analyzing investment opportunities -- with NewWorld taking care of the United States and Ambienta addressing Europe.

Investors hoping to ride the climate change bandwagon have had a roller coaster ride over the past two years. Greentech stocks soared with the oil spike in 2007 and 2008, then crashed with stock market and commodity price declines in 2009. Since then, some of the most obvious stock plays have strongly rebounded. Many solar stocks have posted high double-digit gains since rebounding off year-to-date lows in March 2009.

The leading solar panel manufacturer, FirstSolar (NASDAQ: FSLR) has appreciated by 45% from lows of near $100 to a closing price of $154 on October 14. "I wouldn't be stepping into buying these stocks right now," says Pacific Crest senior analyst Mark Bachman, who covers solar stocks. Still, he rates FirstSolar as a market perform and considers it the best solar stock at present on his coverage list.

Well, what have you done for me lately, right? Investors, less than thrilled with the returns that venture capital funds have been delivering, are taking their money and going home. The number of new funds launching has thus dropped precipitously, and it looks like the industry will be smaller, with fewer players, according to the National Venture Capital Association.

Of course, the next wave will attract many to ride it, and that could be enough to turn the tide (once again).

The clean technology wave just got a little bigger. This tends to be a side-effect of interest from billionaire investor George Soros. And, as usual, it's more than just money; it's more than just a return. Soros, yet again, is trying to save the world. Interestingly, the bold move was announced at a meeting on climate change sponsored by Project Syndicate – an international association consisting of 430 newspapers from 150 countries (and thus with clear ties to the past, rather than future).

The investor and founder of Soros Fund Management LLC is planning to put $1 billion into clean-tech opportunities using what he calls "rather stringent criteria," which involves being "profitable but should also actually make a contribution to solving the problem [i.e., of clean technology adoption and proliferation]." Soros didn't provide any other details on the nature or scope of his investments.

We're tired of bubbles, right? Anyone 30 or older has lived through two big ones so far, with a brief period of prosperity separating the decimation of dot-com largesse and mortgage-fueled paper wealth. It could take until 2014 for the jobs lost to be replenished, and there's little reason for optimism.

So, with the economy in the tank, we can focus elsewhere -- maybe on saving the planet. If we can't put green in our wallets, maybe we can add some to our lifestyles. Or, you could do both. Green technology could be the next boom in the United States, even if we do lag some parts of the world, and investing in clean solutions is really nothing other than investing in the next big thing. Even if you don't give a damn about climate change (or don't think it exists at all), the green market could likely become your employer -- or trigger the economic growth that will create your next job.

Some signs are visible already.

Rajendra Pachauri, U.N. climate scientist, has good news and bad news. I'll give you the latter first: eat less meat. Doing so will help slow global warming. The good news, also related to climate change, is that Pachauri, chairman of the Intergovernmental Panel on Climate Change for the United Nations, investing in green technologies now is a smart move. So, by following Pachauri's advice, you cut down on your meat but reward yourself with a decent investment return.

If you take his advice as a whole (pretending you don't know you can do one part without the other), it's like getting paid to eat your veggies. Everyone who's been five years old at some point knows that being given green to eat green is ample motivation. The fun part, here, is that you're financing it by investing in green. It all matches!

Venture capital investment in clean technology grew 10% from the second quarter to the third this year. According to a report by the Cleantech Group and Deloitte, 134 companies received investments of $1.59 billion – up from $1.2 billion in the second quarter. The sector's upward trajectory continues, with last quarter marking the second in a row of double-digit growth. In the first quarter of 2009, venture capital investment in cleantech companies hit a low of $1 billion.

The strong third quarter has made the cleantech sector the largest in the venture capital business, according to the Cleantech Group, pulling ahead of biotech. Twenty-seven percent of venture capital funds invested in the second quarter of 2009 went to cleantech companies – up from 3% at the beginning of 2004.

GreenBytes, a unique data storage appliance company, has just received an $8 million Series A round of investment financing. Battery Ventures completed the deal, which provides fresh resources for the Rhode Island-based energy-efficient technology company.

Founded in 2007, GreenBytes offers network attached storage (NAS) and storage area network (SAN) solutions that reduce energy consumption, providing a cost savings opportunity while also addressing corporate social responsibility considerations.

The World Bank Group's financing for renewable and efficient energy projects increased 24% in the last fiscal year. Reaching $3.3 billion, the bank's clean technology investments have reached their highest level ever.

At the Bonn International Renewable Energies Conference in 2004, the World Bank committed to increase its contribution to cleantech investments by $1.9 billion through 2009. Not only did last fiscal year's result more than double the five-year commitment, the World Bank's support surged by $7 billion.

If conventional wisdom mattered, super venture capitalist Vinod Khosla could not have picked a worse time to launch a massive venture capital fund focused on extremely risky green technology investments. Yet Khosla, a VC legend in Silicon Valley, not only pulled it off but ended up with money away, according to the New York Times.

In fact, many of Khosla's investors are gun-shy state pension funds, still smarting from nasty losses suffered in venture capital and private equity placements that went horribly wrong in the economic meltdown of the past two years.