Increased demand for solar following the unfortunate war in Ukraine and a significant boost to the US market with the Inflation Reduction Act (IRA) acted as strong reasons for the global solar sector raising $24.1 billion corporate funding in 2022, but high interest rates led to an annual drop of 13%, says Mercom Capital Group, while Rystad Energy expects spending on solar investments in 2023 to add up to $250 billion.
There was 'record' venture capital and private equity funding last year, according to Mercom CEO Raj Prabhu with a total of $7 billion raised, reflecting an annual increase of 56%. In its report 2022 Solar Funding and M&A Report, Mercom counts it the highest annual funding for the solar sector since 2010.
This $7 billion comprises 90 venture capital deals out of which $5.9 billion was raised by 62 downstream players, followed by solar PV companies raising $864 million, balance of system (BOS) firms $83 million, thin-film companies $76 million and service providers $44 million. Concentrated solar power firms raised $13 million.
US based Intersect Power alone raised $750 million equity investment from several investors led by TPG Rise Climate to support its 8 GW portfolio (see $750 Million Investment For US Solar Developer).
There was a decline of 32% YoY in public market financing last year with a total $5.1 billion reported. Biggest chunk of this amount, $1.57 billion, was raised by JinkoSolar Holding's main subsidiary Jinko Solar (see Jinko Solar Now Publicly Listed In China).
Another 24% decline was reported for debt financing that amounted to $12 billion, even as securitization deals contributed $3.1 billion with 12 deals.
There was an increase in mergers and acquisition deals for solar sector, 128 in number, highest since 2010, with 8 deals exceeding $1 billion each. The among these with $6.8 billion was the acquisition of conEdison by RWE (see RWE To Take Over Con Edison's Clean Energy Business).
In all, 66 GW capacity exchanged hands last year, with project developers picking up 35.7 GW.
Complete report can be purchased from Mercom's website with prices starting from $599.
Looking into the future, Rystad Energy expects an investment of $620 billion in 2023 in low carbon projects, namely in the geothermal, carbon capture, utilization and storage (CCUS), hydrogen, hydropower, offshore and onshore wind, nuclear and solar industries, up from about $560 billion in 2022.
For solar, the expectation is for annual spending on investments to grow 6% to $250 billion this year. Irrespective of this, Rystad expects capacity growth for soar to be 'more substantial than dollar investments suggest' thanks to the falling cost of polysilicon.
"Despite a relatively insignificant rise in investment value, installed capacity is expected to swell by roughly 25% to 1,250 GW," according to Rystad analysts.