Even though corporate & VC funding in the solar sector is yet to ascend to the heights it achieved in 2010/11 or even 2014/15, last year was an improvement thanks to higher installation levels, a lack of threat to the ITC in the US, and several other factors. In 2018, however, it could change if US President Donald Trump decides to impose higher tariffs in the trade case, warns Indian consultancy Mercom. (Source: Mercom Capital Group)
- A total of $12.8 billion was raised in global corporate funding in 2017, pushed by a strong Q4/2017, according to Mercom Capital report
- Global VC investment totaled $1.6 billion in 99 deals in the entire year, increasing 30% from the $1.3 billion reported in 78 deals the year before
- Out of the top six VC deals in the year, five were reported from India, taking the total to $1.6 billion in 99 deals in the entire year
- Public market financing didn’t grow as much, reporting flat growth of $1.7 billion in 33 deals
- Securitization deals surpassed $1 billion for the year for the first time, with total debt financing at $9.5 billion in 2017
Mercom Capital: Global Corporate Funding For Solar Industry Grew 20% Annually In 2019 To $11.7 Billion ‘Rounding Off A Strong Year’
(10. January 2020)
Mercom Capital Group: With $3 Billion Raised In Q3/2019, Global Corporate Funding During 9M/2019 Increased 34% YoY To $9 Billion
(14. October 2019)
Mercom Capital Group Corporate Funding Report For First 9 Months Of 2018 Shows Investors Interested In Project Acquisitions, Not Companies; Total Corporate Funding Drops 10% YoY With Reduced Global Solar Demand
(12. October 2018)
Solar sector raised global corporate funding of $12.8 billion in 2017, increasing the numbers by 41% over $9.1 billion raised in 2016. The largest push came during Q4/2017, according to Mercom Capital Group’s 2017 Solar Funding and M&A Report.
Venture Capital Investment
Global VC investment totaled $1.6 billion in 99 deals in the entire year, increasing 30% from the $1.3 billion reported in 78 deals the year before. This increase was led by several large private equity deals in India. Of this, solar downstream companies took in $1.4 billion.
The report pointed out that thin-film companies brought in $106 million, while service providers raised $47 million. PV technology companies raised $40 million, balance of systems (BoS) companies secured $36 million. The largest position in this category was a $200 million deal signed by UK-based developer Lightsource Renewable Energy with investment from BP.
The remaining five top deals were reported by Indian companies ReNew Power, Greenko, Hero Future Energies and CleanMax Solar (see US Private Equity Firm Invests In CleanMax Solar and Hero Future Energy Gets Fresh Investment). Greenko raised equity of $155 million from its two existing investors in March 2017 (see Greenko Raises $155 Million).
Public market financing
In 2017, public market financing growth remained rather flat at $1.7 billion raised in 33 deals. A year back, it was $1.8 billion in 27 deals. All initial public offerings (IPOs) together raised a total of $363 million.
Six securitization deals at $1.3 billion in 2017 took total debt financing to $9.5 billion in 2017, compared to $6 billion in 2016. For the first time, securitization deals surpassed $1 billion for the year.
Large-scale project funding announced during the entire year rose to $14 billion in 167 deals, increasing from $9.4 billion raised in 133 deals in 2016. Around 20.5 GW of large-scale projects in the year were funded by 161 investors. In 2016, this number was 5.9 GW funded by 153 investors.
Residential and commercial solar project funds in 2017 amounted to $2.4 billion, decreasing 50% compared to $4.9 billion raised by 30 funds in 2016.
Project acquisitions rose 67% with 228 large-scale solar projects with a combined capacity of 20.4 GW in 2017. In the previous year, it was only 12.2 GW.
“Higher installation levels around the world, the lack of threat to the solar investment tax credit (ITC), lower-than-expected tariff recommendations by the US ITC, strong debt financing activity, and over a billion dollars in securitization deals helped the solar industry have a much better year in terms of financial activity compared to 2016,” said Mercom CEO and Co-Founder Raj Prabhu. “After several challenging years, most of the solar securities were up in 2017, reflecting overall positive sentiments around the solar industry even as several Chinese manufacturers decided to go private.” He went on to challenge: “Of course, all this could change swiftly if President Trump decides to impose higher tariffs in the trade case.”
The 2017 Solar Funding and M&A Report costs $799 and can be ordered at Mercom’s website.