Investments jumped 55 percent from the previous three months, with most of the money flowing to companies that specialize in solar power, energy efficiency and alternative fuels. So far this year, venture capital firms have pumped $3.3 billion into the clean-tech industry, 71 percent more than during the first three quarters of 2007.
There's no guarantee, however, that the records will continue.
The economic crisis now gripping the country didn't strike until the third quarter's waning days. Any impact on venture capital won't show up until the Ernst & Young's next report. But Jeff Grabow, head of the consulting company's clean-tech practice for the Pacific Northwest, said investment shouldn't dry up altogether.
"For the good companies, this is a sustainable, long-term market," he said. "For good companies with good technology and good management teams, there will be opportunities to provide good returns for their investors. It just may take a little longer than it would have."
Even though fuel prices are falling from records set this summer, demand is still rising in China, India and much of the developing world. Those countries will also need more electricity - and cleaner ways to generate it - as their economies grow.