Clean technology emerged as an investment category in 2002 and gained space quickly as a result of the dramatic rise in the cost of oil through 2007 and 2008. The sector has suffered because of the stock market and commodity declines in late 2008 and 2009, but industry and investment experts remain undeterred in identifying clean tech as the growth sector of a new era. There is widespread agreement that clean tech is poised to be the sixth revolution, replacing the age of information technology and telecommunications, spurred not only by innovation but also by dwindling and compromised energy resources and pressing environmental crises.

The term "clean tech" throws a wide net over a variety of processes, services, and products that consume substantially less natural resources than conventional energy-producing technologies. These technologies employ clean, renewable energy sources and materials, thus significantly reducing harmful emissions and waste. From an industry standpoint, these knowledge-based innovations also improve efficiency, performance, and productivity while reducing operation costs, resource consumption, and waste management costs. Clean technologies include solar energy, wind power, biofuels, clean fossil fuels, geothermal power, recycling technologies, electric cars, advanced batteries, energy storage, green building materials, and various IT applications, such as environmental impact assessment tools, integrated energy management systems, and smart grid applications.

The top performing clean technologies in 2008 were solar energy, biofuels, transportation, and wind power, with solar energy claiming nearly 40 percent of clean tech investment dollars, and biofuels 11 percent. Investment experts predict that interest in the more conventional clean tech sectors, such as solar, wind, and biofuels, will rebound slowly because these projects require substantial capital and time to reach implementation, and also because the solar market is still absorbing a material surplus. Instead, investment is shifting from energy generation to energy efficiency. Spurred by federal stimulus targeting, venture interest is growing in the nascent areas of energy storage and efficiency, recycling, water, clean coal, green IT, and the smart grid.

Innovative clean energy technologies often have difficulty obtaining traditional private financing due to the high risk of unproven technology, and private sector investment in large-scale clean energy projects has been insufficient to meet national goals. According to a 2011 PEW report, China is now the leader in clean energy sector investment, investing a record $54.4 billion in 2010. In Germany, investments doubled to $41.2 billion. The US fell to third, with $34 billion in investments. According to the study, the major differentiating factor is national policy: China, Germany, Italy and India have national policies that support renewable energy, which is attractive to financiers.
 
US national policy remains ambiguous, however (PEW Charitable Trusts, 2011). In the second quarter of 2011, "clean tech" received $1.1 billion in committed venture dollars - a 44% decline from the second quarter of 2010. According to some analysts, as federal funding for clean energy technologies dries up, the level of investments will worsen (Eilperin & Mufson, 2011). In September 2011, Section 1705, a temporary program administered by the Department of Energy's (DOE) Loan Guarantee Program Office (LPO), sunset and will not likely be extended. In a March 2011 letter to the Obama administration, 34 CEOs detailed the need to continue the provisions outlined in Section 1705, citing a critical loss of jobs, domestic energy production, and global competitiveness (Lane, 2011).