Even as the Senate plans to vote on the financial bailout on Wednesday and the credit crunch is starting to threaten many factors of the cleantech industry, investment in the cleantech sector hit yet another record during the third quarter of this year. According to the Cleantech Group, venture firms invested $2.6 billion into 158 companies globally in the third quarter of 2008. That was a 37 percent increase from the year before, a 17 percent increase over the previous quarter, and means the first three quarters of 2008 brought in more cleantech investment than the entire total for 2007.

So what sectors took all that cash? The report says algae companies (see our 15 algae startups here), smart grid startups (see the smart energy home here) and thin-film solar firms took record levels of funding. Thin-film companies brought in a whopping $620 million and smart grid startups delivered $202 million, boosted by the launch of electric vehicles in the coming years.

Rockport Capital was the most active venture firm in terms of number of deals for the quarter, followed by Google (wow!), Advanced Technology, Kleiner Perkins Caulfield & Byers, and Khosla Ventures. There was also a record number of acquisitions for the quarter with 138 transactions hitting the $1 billion level. At the same time there were only four IPOs, worth $587.1 million.

But don’t expect the party to last. The Cleantech Group says it expects a slowdown in the coming quarter. There’s no way this overall economic slowdown won’t hurt sectors that need extensive capital to move into production, like biofuels and solar. We’re thinking less capital intensive plays, like green software, will become more popular in the coming months.

The failed passage of a financial bailout bill has taken a harsh toll on most corners of the stock market, but few sectors saw steeper one-day declines Monday than solar stocks. That’s largely because there was a second piece of bad news coming from Congress that had special meaning for the solar industry.

Much like the bailout debacle, the House of Representatives and the Senate can’t find agreement on how to extend energy tax credits that are key to a more mainstream embracing of solar panels among businesses and homeowners. Incentives such as tax credits and subsidies are crucial to lowering the costs of solar power to make it competitive enough to reach a large scale.

The perception that Congress had been dragging its feet was a big factor in driving down solar-stock prices this year. Now legislators are taking action, but the arguing and sniping from both houses is threatening to delay a bill possibly into early 2009. More details on the political deadlock can be found at Congressional Quarterly and Bloomberg.

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Oregon’s Business Energy Tax Credit (BETC) has done it again: SANYO North America said today that it will build a new $80-million, 70MW solar manufacturing facility in Salem, Ore. Construction is slated to begin next month and the plant is expected to open in October 2009, ramping up to full capacity by April 2010.

Talk about a successful tax incentive. The BETC, whose provisions offer, among other things, tax credits to renewable energy companies for up to 50 percent of capital investments of as much as $20 million, helped attract three other solar manufacturers to the state in 2007. German SolarWorld kicked off the trend in March of that year, moving its production a matter of miles from Vancouver, Wash., to Hillsboro, Ore., to take advantage of the tax perks. SolarWorld was joined by Santa Clara, Calif.-based Solaicx in June 2007 and by Carlsbad, Calif.-based Peak Sun Silicon the following November.

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GridPoint, a smart grid company that helps utilities balance energy loads, just announced that it has more than doubled its funding, adding a $120 million equity financing round. Those funds will fuel an “acquisition strategy,” and GridPoint says its first purchase, also announced today, is young Seattle-based startup V2Green, which builds smart charging technology to plug electric vehicles into the power grid. The price has not yet been disclosed.

GridPoint, which had already raised more than $100 million, raised this latest round largely from existing investors, which include Goldman Sachs Group (GS), Susquehanna Private Equity Investments, David Gelbaum’s The Quercus Trust, the Altira Group and Standard Renewable Energy Group. This funding brings the company’s total to more than $220 million. The company also has a big list of advisers, which include R. James Woolsey, former director of the CIA, and Pulitzer Prize-winner Daniel Yergin.

The acquisition of smart charging startup V2Green is particularly interesting. In March GridPoint said it had partnered with utility Duke Energy to test its smart charging tech on a controlled outlet in a residential garage. It didn’t sound too impressive, so good thing the company’s investing in some real plug-in tech. We actually asked V2Green what they thought about the GridPoint trial at the time, and they said they were actively trying to figure out more.

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Looks like Chrysler was feeling out-shined by GM’s Volt showing last week. This morning Chrysler unveiled plans for at least four electric vehicle models — an all-electric Dodge EV, a range-extended electric Jeep and a minivan, and a city vehicle, although there’s no EcoVoyager in site. Chrysler says one of the vehicles will be on the market by 2010. Chrysler CEO Bob Nardelli said the company has “made huge commitments both from a resource standpoint and a financial standpoint” to electric vehicles.

Nardelli is very aware of Chrysler’s down and out reputation — Chrysler was previously dumped by Daimler and then taken over by buyout firm Cerberus. He told CNBC: “We may have been knocked down but we’ve never been knocked out.” ‘Til now Chrysler hasn’t been a prominent voice in the electric vehicle discussions.

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While there certainly is no ideal time to have one’s financial institutions come crumbling down, the collapse of America’s major banks was particularly poorly timed for those hoping to have the renewable energy credits extended before Congress adjourned. The Senate pushed back a vote from Friday to this week on the tax credits, but with the need to pass legislation on the financial bailout, the renewable tax credits could easily take a back seat. Meanwhile, the much touted bipartisan “Gang of 20″ has pulled their bill and plan to reintroduce it next year. Update: The Senate has passed an amended energy package with $18 billion for clean energy and it’s heading back to the House now for a vote, maybe.

The Senate is set to take up debate of the energy bill the House just passed some time this week. House Democrats pushed through a bill last week with almost no Republican support that does extend the renewable energy credits but manages to simultaneously infuriate both the treehuggers and the “drill, baby, drill” contingent. The bill allows for offshore drilling 100 miles offshore, or 50 miles if states would allow it.

The clock is ticking as Congress is set to adjourn for the year at the end of this week. An appropriations bill must also be passed to keep the government funded beyond Oct. 1st when the governmental fiscal year ends. Republicans have threatened to block such a bill, effectively shutting the government down, if Democrats don’t vote to lift the ban on offshore drilling.

The renewable energy provisions to be debated were floated in the Senate’s “The Energy Improvement and Extension Act of 2008.” To see what’s at stake for cleantech, check out the energy stipulations after the jump.

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Well this one caught a lot of people napping. Turns out that Chrysler actually has some electric vehicle plans of its own, and they plan to show them to their dealers this week. Update: Chrysler showed off an all electric Dodge EV, a range-extended Jeep and a minivan and plans for a city vehicle on Tuesday — no ecoVoyager, though. Check out our post here.

As far as American automakers are concerned, it’s not exactly the best of times. And after Chrysler was dumped by Daimler and then taken over by buyout firm Cerberus, a lot of gearheads started to think that the Big Three would soon be the Big Two.

But what’s this? Not only is Chrysler showing signs of life, but it’s jumping into the EV game, and jumping in with both feet. Although the company is being secretive with the details, it does have plans to preview a number of eco-friendly cars to dealers this week, including possibly the Chrysler RE-EV ecoVoyager.

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With the expiration of the renewable energy tax credits looming large, solar companies are scrambling to get their solar projects connected to the grid before the end of the year. GreenVolts, developer of large, concentrated photovoltaic arrays said today that it’s raised $30 million in Series B funds to help it get the first megawatt of its GV1 project online. This is less than we expected when CEO Bob Cart said at the Intersolar conference in July that his company’s second round would be “less than $100 million.” Well, that’s technically true, and we’re still waiting to hear back from GreenVolts to see if they raised less than originally planned.

Like many of the company releases coming out about yet-to-be-built solar power plants, GreenVolts is claiming a world record with its GV1 installation, which it says will deliver “the world’s largest non-silicon concentrating photovoltaic project.” The GV1 project is to be built on eight acres in Tracy, Calif. (Check it out on our map.) GreenVolts has signed a power purchase agreement with utility PG&E for 2 megawatts of power by 2009 from GV1, the first megawatt of which GreenVolts says it will deliver by the end of this year.

GreenVolts’ technology uses dishes set on a rotating, dual-axis “CarouSol” which tracks the sun, harnessing its rays and concentrating them onto small but efficient solar cells. The company says its solar systems require less land and produce twice the energy of traditional solar panels. This round of funding comes from Oak Investment Partners. A year ago GreenVolts, winner of the 2006 California Clean Tech Open, raised $10 million in Series A fund from Greenlight Energy Resources and Avista.

As the Mayor of San Jose showed us, cities are becoming very eager to implement green practices, and they can act as the first line of defense for fighting climate change. So, what are the greenest cities over all? According to researchers at SustainLane this morning, Portland, Ore., is the tops, followed by San Francisco, Seattle, Chicago and New York (check out their complete list of the 50 greenest cities).

SustainLane says the criteria includes issues such as air quality, clean energy, how residents commute to work, LEED buildings and green businesses. Portland has been working on a green vision since Oregon adopted a sweeping progressive land-use policy (PDF) in the early ’70s and is still working on getting all car trips — commute, home-to-store — to under 20 minutes, says SustainLane. The city’s focus on transit-oriented development, regional development, non-pipe stormwater management, successful redevelopment of the Pearl District, Recycle At Work program and Bicycle Master Plan are among the initiatives that have earned the city it’s green cred, and likely played a role in earning the SustainLane’s kudos.

The list is relatively unchanged since previous years, where Portland remained No. 1 and San Francisco, Seattle and Chicago filled in the rest of the top four stops. San Jose Mayor Reed can be happy to note that the city went up two in the rankings to 21, and New York, Boston and Minneapolis all moved up too. Oakland dropped several rankings, as did San Diego and Colorado Springs.

Brammo, an Ashland, Ore., startup that makes electric motorcycles, has raised $10 million from investors, including the VC arm of electronics chain Best Buy, according to PEHub.com. Brammo says its bike, the Enertia, has an initial price tag of $15,000 (set to drop to $12,000 later this year), can get 45 miles per charge, and is significantly more efficient than both standard motorcycles and currently available electric cars (see chart below).

Best Buy Capital hasn’t made many public investments (its formation made the news earlier this year because of discovered job postings), and an electric motorcycle doesn’t seem like a standard product to sell at one of its stores. But Brammo’s CEO Craig Bramscher told PEHub that its motorcycle can trend more toward being a consumer electronic than a vehicle.

The Enertia joins a growing list of new alternative electric vehicles that aren’t the standard four-wheeled cars, including VentureOne from Venture Vehicles, Aptera’s Typ-1 and the Vectrix. Prominent venture capitalists are backing both Venture Vehicles and Aptera; Brammo’s other investors include Chrysalix Energy Venture Capital.