Venture capital funding market for renewable energy projects will triple by 2020 due to positive regulatory policies and technological innovations, according to a new study.

In a report out today called Venture Capital Funding in Renewable Energy in Europe, analysts from Frost & Sullivan finds that Europe and North America have seen the greatest deal activity. However investors are now looking at South Asia and the Asia-Pacific as emerging regions of renewable development.

Frost & Sullivan financial analyst Vinod Cartic said that “2011 was a stellar year for renewables deal-making with the number of deals rising by two-thirds year-on-year, although total deal value went down by one-third”.

“Europe, in particular, followed by the Asia-Pacific region, led this trend towards more but smaller deals. This was in contrast to North America, which had fewer deals of larger individual values.”

He added that “newer technologies such as thin-film solar and advanced biofuels such as cellulosic biofuels and biofuels from algae are among the most pursued green energy technologies”.

Investments in sustainable energy have also broadened to include energy storage, energy efficiency and Smart Grid technologies.