The new conventional wisdom is in: cleantech is a bust. That’s the charge made by a series of articles and white papers. There’s just one problem: it’s not true.

The basic argument is that beginning around 2006, venture capitalists started pumping money into cleantech, driven by a naive confidence that they could save the world and make profits at the same time. But over the past few years cleantech hasn’t panned out like investors thought it would – so goes the conventional wisdom – so they’ve retreated to the safety of web and IT, leaving the cleantech industry wanting for investment and steeped in political controversy.

But the numbers directly refute most of this story. What critics have been calling the “cleantech bust” more often goes by the name “the Great Recession.” And with 2011 data now in, it’s clear that cleantech investment is more or less recovering along with the economy.

“We’re in the early innings of a long ball game,” Matthew Nordan of Venrock Capital wrote in December. Cleantech faces very real issues – economic and political – and the fit between the sector and venture continues to evolve. But there has been no bust.

Cleantech Venture Capital: Not a Bust

Perhaps the most widely read case against cleantech was a Wired article by Juliet Eilperin, The Washington Post‘s very capable environmental reporter, unambiguously titled “Why the Clean Tech Boom Went Bust.” One common defense of the “bust” argument is that it’s true of cleantech venture capital, if not of the industry more broadly, and Eilperin’s piece is largely focused on VC. But the accusation doesn’t hold up.

Here’s the crux of Eilperin’s argument:

In 2005, VC investment in clean tech measured in the hundreds of millions of dollars. The following year, it ballooned to $1.75 billion, according to the National Venture Capital Association. By 2008…it had leaped to $4.1 billion… Avarice, altruism, and policy had aligned to fuel a spectacular boom.

Anyone who has heard the name Solyndra knows how this all panned out. Due to a confluence of factors—including fluctuating silicon prices, newly cheap natural gas, the 2008 financial crisis, China’s ascendant solar industry, and certain technological realities—the clean-tech bubble has burst…

Solyndra is a data point, not a trend. Eilperin correctly points out that cleantech venture investments peaked in 2008 and fell off a cliff in 2009, but so did venture investments more broadly. Venture capital has recovered substantially over the past two years, with investments in the U.S. up dramatically in 2011 to $28.4 billion, the highest since 2008, and the third highest annual investment in the last ten years.

So how did cleantech do? Venture investments in U.S. cleantech companies clocked in at $4.3 billion in 2011, a record high, according to data from PricewaterhouseCoopers and the National Venture Capital Association, the same source Eilperin cites.

The easiest way to control for the effects of the recession is to look at cleantech venture investment as a percentage of total venture dollars. According to DowJones VentureSource, that number jumped significantly from 10.7% in 2007 to 17.8% in 2008. If cleantech VC had busted, that would have dropped back down. But it has more or less held steady since, at 15.7% in 2009, 17.2% in 2010, and 15.0% in 2011. Hardly a bust.

And globally, cleantech venture funding is recovering well, according to research by The Cleantech Group:

As Cleantech Group CEO Sheeraz Hazi wrote in a recent blog post:

Since 2005, cleantech venture investment has increased each year except for 2008 to 2009 when we experienced the mother of all economic crises. On average, cleantech venture investments have grown 26% per year since 2005.

Venrock’s Nordan also looked at the performance of cleantech VC in his excellent blog series on the subject and concluded that “cleantech VC performance is roughly equal to the VC asset class overall.”

Renewables Are on the Rise, But Real Issues Remain

Outside of venture capital, the story is, if anything, more positive. The deployment of renewable energy is “expanding rapidly” across the globe, according to the International Energy Agency. Overall renewable energy deal flow (beyond just venture capital) set a record in 2011 and has surpassed fossil fuels. And a report this summer from The Brookings Institution found strong job growth within the U.S. cleantech sector.

Real challenges remain. The U.S. continues to lack a serious federal climate policy, retarding growth of the industry domestically, and energy politics in D.C. look even worse than they did when the climate bill failed in 2010. Solar faces a wide array of issues from rapidly dropping costs to Chinese subsidies. And on the venture side, there appears to be a dearth of early stage financing available.

But even taken together this hardly amounts to a “bust.” These are the growing pains of a relatively new innovation sector. One that isn’t going away anytime soon.