SAN FRANCISCO - Clean technology has for the first time become the top category in U.S. venture capital investment, eclipsing biotech and software, as private money follows the government's lead, the Cleantech group reported.

Governments are having an effect -- emboldening private capital to get back in the game, said Dallas Kachan, managing director of Cleantech Group, a research and advisory firm which issued its third quarter report on Wednesday.

Solar was the leading category in $1.59 billion invested worldwide in 134 companies that make items such as electric cars, advanced batteries, green buildings, energy efficient building materials and renewable fuels and chemicals.

In the United States, clean tech won 27 percent of venture capital investment in the third quarter, ahead of biotechnology (24 percent), software (18 percent) and medical devices (17 percent).

Kachan and Scott Smith, clean tech leader for Deloitte & Touche which jointly issues the report, cited the public offering of stock in battery maker A123 Systems Inc last week as heralding others from clean tech companies.

The Cleantech Index of 78 public clean tech companies worldwide has risen 36 percent this year, beating the 19 percent increase in the S&P 500.

In the third quarter, two-thirds of the clean tech venture investment was in North America, followed by Europe and Israel with 29 percent, and Asia and India with 4 percent.

Kachan said Chinese clean tech investments tend to be for large infrastructure wind and solar projects rather than more targeted support that tends to draw in venture capital.

In the United States, the single largest venture investment of $198 million went to Solyndra to expand its capacity to maker solar panels for businesses. The money was required as a condition of a U.S. Energy Department loan guarantee for $535 million offered earlier in the year.

Solyndra put solar over the top as the largest category with $451 million, followed by transportation at $383 million.

Transport was led by electric car maker Tesla, which got help from the government in the form of $465 million in low-interest loans from the Energy Department.

Green buildings were the third category, led by Serious Materials with $60 million. Serious Materials, which makes high insulation windows and other materials, estimates it will get $50 million from federal stimulus spending.

The other big deal was Solfocus, which is partnering with the city of Mesa, Arizona, to build a concentrated solar power array. It will make use of a 30 percent manufacturing investment tax credit.

Similar findings were reported earlier in the week by the Greentech Media group.

(Reporting by David Lawsky; Editing by Tim Dobbyn)