Corp Funding For Solar In Q1/2020 Down 31% YoY In Q1/2020

Mercom Capital Group: Coronavirus Pandemic Disrupting Solar Markets Globally Leading To Pulling Down Annual Solar Corporate Funding In Q1/2020 By 31%; Cautions ‘Worst Maybe Yet To Come’
06:57 PM (Beijing Time) - 10. April 2020
Presentation1

Mercom Capital Group estimates $1.8 billion having been brought in as total corporate funding for solar in Q1/2020 as COVID-19 virus keeps most markets off work. (Source: Mercom Capital Group)

Key Takeaways

  • According to Mercom, global solar corporate funding in Q1/2020 was $1.8 billion, compared to $2.8 billion a year back
  • The drop of 31% was due to lower VC and public market financing as COVID-19 disrupted solar markets globally during Q1/2020
  • It worries that things may get worse in the near future but hopes activity picks up during H2/2020

Lower venture capital (VC) and public market financing during the first quarter of 2020 due to the coronavirus pandemic disrupting solar markets around the world led to an annual decrease of 31% in total corporate funding for the global solar sector that amounted to $1.9 billion in Q1/2020. In Q1/2019, global solar corporate funding was $2.8 billion (see Solar Attracted 10% More Corp Funding In Q1/2019).

Mercom Capital Group makes this assertion in its Q1 2020 Solar Funding and M&A Report, wherein it calculates total corporate funding including venture capital funding, public market and debt financing for the entire solar PV sector globally.

“Funding levels dropped in Q1 as the Coronavirus pandemic brought the global economy to a halt. Most large economies are shut down and there is minimal activity in solar markets,” said Mercom Capital Group CEO Raj Prabhu. “Solar project M&A was the bright spot in this time of uncertainty, proving once again that solar is a safe long-term bet. The worst maybe yet to come, but hope is that activity picks up in the second half of the year.”

Of the total corporate funding, Q1/2020 VC funding was $145 million in 9 deals compared to $176 million raised in 13 deals last year with majority going to downstream companies. Public market financing was a downer with only $22 million raised in 1 deal compared to $247 million in 3 deals on annual basis.

Announced debt financing in the reporting quarter was $1.8 billion in 7 deals including one securitization deal. Last year, it was $2.4 billion in 19 deals. There were 12 solar merger & acquisitions (M&A) transactions with 11 involving solar downstream companies. 55 large-scale project acquisitions were reported but only 8 of these disclosed.

Of the more than 12 GW acquired during the period, oil and gas majors lapped up over 6.45 GW, followed by investment firms acquiring 4.14 GW and project developers taking over 937 MW.

The report can be bought on Mercom Capital Group’s website with prices starting from $299.

Anu Bhambhani

Anu Bhambhani is the Senior News Editor of TaiyangNews

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Anu Bhambhani