Renewable Energy Memo

California-base Khosla Ventures has raised a $1.1 billion fund to invest in renewable energy and clean tech ventures. 

The NY Times claims that it is the biggest first-time fund in a decade and the announcement is a shot-in-the-arm to this sector just as the economy is beginning to recover. 

In the first half of the year, investments in green tech plunged to $513 million from $2 billion in the first six months of 2008, according to a survey by PricewaterhouseCoopers. 

Fund founder Vinod Khosla said, “There’s an opportunity basically where technology innovation changes economics.   In our business you can’t get in and out when the markets are bad. In some sense, when most people aren’t investing, it’s a good time to invest.”

Khosla has deep roots in funding tech companies. He is a co-founder of Sun Microsystems Inc. and a former partner at Silicon Valley venture capital firm Kleiner Perkins Caufield & Byers.

For his latest round, he won investments from the California Public Employees’ Retirement System, the nation’s largest pension fund, which put $200 million into the bigger fund and $60 million into the high-risk fund. About two-thirds of the investments will be devoted to green tech, with the remainder invested in more traditional technology firms.