Venture capital funding in cleantech companies swelled to $1.5 billion in the second quarter of 2010, its highest level since Q3 2008, according to a report released today by Ernst & Young. This is a staggering 64 percent increase over the amount invested in Q2 last year.

The number of deals closed also saw a slight increase, about 4 percent from last year, to 68. The disproportionate growth in dollars and deals points to one of the major trends emerging this quarter: more interest in larger, late-stage rounds.

Of the $1.5 billion total, about $891 million went into 33 late-stage deals, concentrated in the automotive, solar and biofuel subsectors — this represents an 83 percent increase in late-stage rounds and 143 percent increase in terms of dollars over 2009. As reported earlier by the National Venture Capital Association and PricewaterhouseCoopers, some of the largest deals in the venture capital industry overall were green.

Prime examples include the $439 million for Oakland, Calif.-based solar thermal developer BrightSource Energy; the $350 million second round for Palo Alto, Calif.-based electric vehicle infrastructure company Better Place; and the $50 million stake taken by Toyota in Tesla Motors when it went public in June.

The advanced transportation market was also trumped up in Q2 by a $23.5 million investment in Khosla Ventures-backed efficient engine play EcoMotors, and a $35 million round for plug-in sports car maker and Tesla competitor Fisker Automotive.

Despite the buzz surrounding electric vehicle and hybrid companies, 50 percent of the top 10 cleantech deals were actually in solar, and about $266 million flowed into biofuel development (a massive 517 percent increase from Q2 2009).

The Ernst & Young report also indicated growing interest in lesser known niches of cleantech. Energy efficiency, for example, is getting a lot more attention because it doesn’t require much capital, produces quicker returns, and is attracting a lot of heavy-hitting customers — corporations looking to shave their energy consumption and bills. About $199 million was invested in 15 energy-efficiency deals during the quarter.

There were nine merger and acquisition deals during the period, totaling $404 million, the bulk of which came from First Solar’s $285 million purchase of NextLight. With late-stage companies flush with cash, facing a disappointing if not frozen green IPO market, there will probably be an uptick in acquisitions before the end of 2010.

Also notable: About 47 percent of the deals and 62 percent of the dollars went to California-based companies — further evidence that Silicon Valley is channeling its technological expertise into the growth of more industrial, non-computing based cleantech enterprises.